Freeport-McMoRan (FCX)

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What investors don’t realize is for every dollar invested the government will match it with first rights in having there contribution being returned.

The other is that for the investor it was money already spent. So in reality there not out of pocket a penny.

As a example you spend a dollar of prepaid tax capital. Half the tax was paid by the entity you earned the capital through be it you are the owner or employee.

So now you have in actual money earned $. 75 of that dollar. The other $.25 you spent on taxes bring it back to a dollar. By investing that dollar you are now leveraging the dollar by twenty five percent on the premises that you now owe that money back to the goverment interest free but not collateral free giving you a liability position in the purchasing of the equity.

So all liability the greater then the given company assets is a liability too the equity holder.

Now there is a reward taken for the risk of that liability that isn’t realized and that is the credit “ accounts recievables +(payables /4 ) + shareholders deficit+ treasury stock]= total sales Cashflow = total revenue minus recievables were the receivables is the liability profit and the shareholders deficit plus the treasury stock is the liability cost of the recievable liability.

You should always allow at least a twenty percent risk due too debt liability. In other words as more liability is purchased then so does the risks value climb.

Looking at FCX’s future as cost escalates along with recievables so does the liability. If recievables go up too create sales ie: credit then so does the liability risk.

If the company had come out with the statement that revenue will be in creasing while debt will be declining then that statement would be a positive one. One has to remember that offering credit debt holds a much greater risk then actual institution debt it self. When credit debt excels payable debt it becomes a concern as there is a much greater cost associated in dealing with bad debt associated with a credit offering then a capital debt requirement.

It’s often referred to as bad debt and good debt being bad debt is consumer credit while good debt is capital needs.

Capital needs is always backed by collateral consumer credit does not have the luxuary of collateral in many situations.

I hope this helped folks out in making a educated guess as too the directional move on Monday that the stock should take.