First Solar Inc. (NASDAQ:FSLR)

Return on Assets (ROA)

The Return on Assets (ROA) figures exhibit a notable upward trend beginning in late 2019. Initially negative at -1.53% in December 2019, ROA increased steadily, reaching a peak of 7.77% by September 2021. Following this peak, there was a gradual decline through 2022, descending to -0.54% by December 2022. However, from early 2023 onwards, performance improved again, with ROA climbing consistently and reaching double-digit figures near 10.91% by December 2024. This suggests a pattern of fluctuating profitability, with recovery phases succeeding periods of contraction.

Financial Leverage

The financial leverage ratio remains relatively stable but shows a gradual upward trend over the entire period. Starting at 1.41 in March 2019, the ratio slightly declined to its lowest point around 1.24 in late 2021 but steadily increased afterward, peaking at 1.56 in June 2024 before a minor reduction to 1.51 by September 2024. Such behavior indicates a modest increase in the use of debt or financial obligations relative to equity, potentially contributing to enhanced returns but also implying slightly higher financial risk.

Return on Equity (ROE)

The Return on Equity (ROE) follows a trajectory similar to ROA but with higher percentage values, reflecting the amplification effect of financial leverage. Starting from a negative value of -2.26% in December 2019, ROE improved significantly over the next two years, peaking at 9.73% in September 2021. A subsequent downturn occurred in late 2022, dropping to -0.76% by December 2022. Subsequently, ROE demonstrated strong recovery starting in early 2023, continuing an upward trajectory and reaching its highest value of 16.59% in September 2024 before a slight decline to 16.44% in the final quarter. This suggests increased profitability for shareholders and improved operational efficiency, partially supported by rising financial leverage.

The financial metrics over the observed quarters reveal distinct trends in profitability, efficiency, leverage, and returns to equity holders. These observations contribute to an understanding of the company's financial performance dynamics over time.

Net Profit Margin

The net profit margin exhibits a notable improvement from negative values in early 2019 to consistent positive figures starting in the second quarter of 2019. The margin peaks in the year ending 2024, reaching above 30%. This demonstrates enhanced profitability and operational efficiency. However, there are intermittent declines such as the one observed around the first quarter of 2023, which suggests some volatility in profit generation, albeit with a quick recovery in subsequent quarters.

Asset Turnover

The asset turnover ratio remains relatively stable but low, fluctuating within a narrow range around 0.3 to 0.5. The highest observed ratio is approximately 0.5 in late 2019, followed by a gradual decline and stability around 0.32 to 0.34 from 2022 through 2024. This indicates that while the company’s ability to generate revenue from assets does not change significantly, it remains modest, reflecting either capital-intensive operations or moderate asset utilization.

Financial Leverage

Financial leverage ratios show moderate variability, generally ranging between 1.25 and 1.56. A slight trend of increasing leverage is noted from 2022 onward, peaking in the third quarter of 2024 before a minor decrease. This suggests a cautiously rising dependence on debt or borrowed funds relative to equity, which could amplify returns but also increase financial risk.

Return on Equity (ROE)

ROE closely follows the pattern of net profit margin, with negative returns in early 2019 improving steadily from the second quarter of 2019 onward. ROE peaks at nearly 17% in late 2024, indicating that the shareholders' investment generated increasingly higher returns over the period. The fluctuations in ROE correlate with changes in net profit margin and financial leverage, reflecting the interplay between profitability, asset management, and capital structure.

Overall, the data reveals a company transitioning towards stronger profitability and improved returns for equity holders with relatively stable asset utilization and modest increases in financial leverage. The observed trends suggest effective management of operational efficiencies and capital structure, despite some short-term fluctuations in profitability metrics.

The financial data exhibits various patterns across multiple quarterly periods, revealing insights about profitability, efficiency, and leverage.

Tax Burden

The tax burden ratio displayed significant variability, especially from 2019 through early 2023. It showed unusually high and unstable values around 2019 and 2020, including a sharp negative dip in early 2023 (-5.14). Following this period, it stabilized around values close to or just below 1 from mid-2023 onward, suggesting a return to normal tax impacts on earnings.

Interest Burden

Interest burden ratio improved markedly over the observed period. Initially, the ratio was very low (0.18) in late 2019 but steadily increased from 2020 through 2024, reaching consistently high levels near 0.97 to 0.99. This trend indicates a reduction in the interest expense burden relative to earnings before interest and taxes, signaling improved financial health or reduced interest costs.

EBIT Margin

The EBIT margin showed an upward trend throughout the period. The margin started with negative values in 2019 (-3.05%, -0.86%) but turned positive around mid-2019, with continual improvement peaking in the early quarters of 2024 at approximately 35%. This reflects increasing operational profitability and effectiveness in controlling costs relative to revenue.

Asset Turnover

Asset turnover ratio remained relatively stable but with a slight declining tendency over the years. It peaked near 0.50 at the end of 2019 and declined to roughly 0.32 to 0.34 range from 2021 onwards, indicating marginally less efficient use of assets to generate sales.

Financial Leverage

Financial leverage remained within a narrow range from approximately 1.25 to 1.56, showing a gradual increase in leverage over time. The slight rise suggests a moderate increase in the use of debt or liabilities relative to equity between 2019 and 2024, possibly supporting growth or operational needs.

Return on Equity (ROE)

ROE mirrored the improving profitability trends, starting from negative values in 2019 (-2.26%) and progressively rising to above 16% by early 2024. This increase aligns with the improving EBIT margins and stabilized interest burden, indicating enhanced overall returns to shareholders driven by better operational results and controlled financial costs.

The financial data reveals distinct trends in profitability, efficiency, and asset utilization over the analyzed periods. The metrics observed include Net Profit Margin, Asset Turnover, and Return on Assets (ROA).

Net Profit Margin

The net profit margin shows a progressive improvement starting from a negative figure of -3.75% in December 2019. From March 2020 onward, the margin consistently rose, peaking at 18.96% in September 2021. Following this peak, the margin slightly declined but remained positive with some volatility, reaching a low of 3.75% in September 2022. Subsequently, there was a notable upward trend, reaching a high of 32.41% by June 2024. This indicates an overall strengthening in profitability, especially pronounced in the most recent quarters.

Asset Turnover

Asset turnover values started at 0.41 in March 2020, with minor fluctuations observed throughout the period. The ratio experienced a slight increase, touching 0.5 in December 2020, but generally hovered between 0.32 and 0.42 in subsequent quarters. The range and variation suggest stable asset utilization with no significant improvement or deterioration in the ability to generate sales from assets across the periods.

Return on Assets (ROA)

Return on Assets mirrored the initial trends of the net profit margin, beginning with a negative value of -1.53% in December 2019. The ROA then steadily improved over the following quarters, peaking at 7.77% in September 2021. A decline followed, with ROA lowering to nearly zero and briefly turning negative (-0.54%) in December 2022. Since then, a strong recovery trend is apparent, with ROA reaching 10.91% in June 2024, suggesting improved efficiency in generating returns from assets in recent periods.

Overall, the data illustrates an initial phase of financial challenge prior to 2020, followed by a marked improvement in profitability and returns on assets through 2021. The subsequent periods saw some volatility and a mid-term decline in profitability ratios; however, the most recent quarters indicate a significant recovery with new highs attained particularly in profitability measures. Asset turnover remained relatively stable without significant upward or downward trends, indicating consistent asset utilization efficiency. These trends collectively suggest an evolving positive financial performance with constructive momentum in profitability and asset returns.

The analyzed financial metrics exhibit distinct trends and fluctuations over the reported periods.

Tax Burden

The tax burden ratio shows significant volatility. Starting from a lack of reported data in early periods, a notable spike to 24.72 is seen in June 2020, followed by a general decline trending towards values below 1 from late 2020 onward. A notable negative figure of -5.14 appears in March 2023, after which the ratio stabilizes near 0.9, indicating a normalization in tax impact relative to pre-tax income.

Interest Burden

The interest burden ratio initially reports a very low value of 0.18 in June 2020 but then rises steadily, reaching levels around 0.97 to 0.99 from late 2020 through the most recent periods. This upward trend suggests gradual improvement in the company's operating income after interest expenses, reflecting a more manageable interest expense or reduced debt burden over time.

EBIT Margin

The EBIT margin shows marked growth throughout the periods. The margin was negative or near zero at the beginning (e.g., -3.05% in September 2019), then improved substantially to double-digit values by late 2019. It peaked at 20.98% in June 2021, before a decline and fluctuations in 2022, including a significant dip to 0.79% in December 2022. From early 2023, the margin increased sharply again, reaching above 35% in the latest quarters, indicating strong operating profitability in recent periods.

Asset Turnover

The asset turnover ratio is relatively stable, ranging between approximately 0.32 and 0.5 across all periods. The highest levels occur around late 2019 (0.5), followed by a slight decline and stabilization near 0.33 in later periods. This steadiness implies consistent efficiency in generating revenues from assets despite other operational fluctuations.

Return on Assets (ROA)

ROA mirrors the trends in EBIT margin with a generally upward trajectory. After negative or low values in early periods, ROA increased to a peak of 7.77% in September 2021, dipped again through late 2022 but surged once more starting in 2023, achieving values above 10% recently. This reflects improved overall profitability relative to total assets, aligning with enhanced operational performance.

In summary, the company has experienced periods of financial volatility but shows clear improvement in profitability metrics, particularly EBIT margin and ROA, in recent quarters. Stabilization in interest burden, alongside sustained asset turnover, supports a picture of enhanced operational efficiency and profitability resilience.

The analysis of the provided quarterly financial data reveals several notable trends in key profitability and burden ratios over the period examined.

Tax Burden Ratio

The tax burden ratio exhibits considerable fluctuation throughout the quarters. Starting with missing data in the early periods, it shows a sharp increase reaching 24.72 by June 2020, then rapidly declines to values consistently below or around 1.0 from late 2020 onward. Negative and atypical values such as -5.14 observed in March 2023 indicate potential anomalies or unusual tax benefits in that quarter. From mid-2023 to the latest quarter, the ratio stabilizes near 0.9, suggesting relatively consistent tax efficiency in recent periods.

Interest Burden Ratio

This ratio reflects a significant improvement from an initial low point of 0.18 in June 2020 to a stable range between 0.95 and 0.99 in subsequent quarters. The upward trend indicates reduced interest expenses relative to earnings before interest and taxes (EBIT), displaying enhancements in managing financial costs or lower interest obligations contributing to operational profitability.

EBIT Margin (%)

The EBIT margin reveals a strong upward trend over the time period. Starting with negative margins of -3.05% and -0.86% in early quarters of 2019, it transitions to positive territory by mid-2019 and progressively increases, reaching mid-teens and high twenties percentages by 2023 and 2024 quarters. The margin peaks at above 35% in late 2024, reflecting consistent operational efficiency gains and profitability improvements at the EBIT level, despite some volatility seen in mid-2022.

Net Profit Margin (%)

The net profit margin trajectory parallels that of the EBIT margin but generally registers lower values, reflecting the impact of taxes and interest expenses. Early quarters record negative margins near -3.75%, followed by steady improvement into positive margins increasing to over 30% in the most recent quarters. The period around late 2022 and early 2023 experiences some margin compression with values dropping near zero or slightly negative, possibly due to extraordinary items or transient operational challenges. However, recovery is observable thereafter leading to strong profitability by the end of the dataset.

In summary, the company demonstrates marked improvement in both operational efficiency and bottom-line profitability over the course of the data series. The tax and interest burden ratios show initial volatility before stabilizing, supporting enhanced profit retention. The EBIT and net profit margins indicate a positive, sustained trend in financial health, with net profit margins displaying periodic short-term weaknesses but maintaining a robust recovery into the latest quarters.