Freeport-McMoRan (FCX)

[eddy2]

A new radical aproch in looking at the numbers
will be discussed today.

An asset is worth what it can produce in revenue as well what it can support in debt. We moved into talking about enterprise value being the outstanding share value minus its outside debt owed. Both can be expressed in a equity currency ie: shares set at a par value with market adjustments applied.


The enterprise value like all assets has a fixed value associated in its value plus a fixed liability.

As long as they balance then all is fine.

To do this the company places all its enterprise value under one entity. The enterprise entity then leases out the operating assets at a nominal fee as long as it does not exceeds what the client is willing to pay. The difference between the liability and the leased out assets is part of the revenue ie: depreciation

Depreciation is a cost passed onto the customer.


So what is the street value of the asset. The street value is the enterprise value minus the accumulated depreciation ie: deficit

What is the owners value? It’s the enterprise value minus goverment debt ie: treasury stock


Capital surplus is nothing more then the cash portion of the enterprise value as credit to the company.


There is of course the cashflow consideration of the enterprise that comes from outside sources ie: gross revenue minus any unforeseen expenses and shareholder payouts equaling retained revenue. This along with borrowing costs associated with state and country treasury stock.


Treasury stock is out side capital in the form of the countries currency that is an iou to its subjects “ its People “