Analysis of Geographic Areas
First Solar Inc. operates in 2 regions: United States and All other foreign countries.
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- Income Statement
- Statement of Comprehensive Income
- Cash Flow Statement
- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Net Profit Margin since 2006
- Total Asset Turnover since 2006
- Price to Operating Profit (P/OP) since 2006
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Area Asset Turnover
First Solar Inc., asset turnover by geographic area
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| United States | |||||
| All other foreign countries |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- United States Asset Turnover
- The asset turnover ratio in the United States exhibited a decline from 2.47 in 2019 to 1.77 in 2020, indicating a reduction in efficiency in utilizing assets to generate revenue. Following this, there was a recovery to 2.21 in 2021, suggesting an improvement in asset utilization. However, the ratio declined sharply in 2022 to 1.17 and remained at the same level in 2023, pointing to a period of lower asset efficiency over the last two years in the observed timeframe.
- All Other Foreign Countries Asset Turnover
- The asset turnover ratio for all other foreign countries started at 0.20 in 2019, increased to 0.39 in 2020, indicating enhanced asset efficiency, but then decreased back to 0.20 in 2021. A slight improvement occurred in 2022 to 0.24, followed by a notable decline to 0.07 in 2023, suggesting a significant drop in asset turnover efficiency in foreign markets in the most recent year analyzed.
- Overall Trends and Insights
- The data demonstrates a more substantial and fluctuating asset turnover trend in the United States compared to other foreign countries, with the U.S. consistently maintaining higher ratios throughout the period. The overall declining trend from 2021 onwards in both regions indicates potential challenges in efficiently utilizing assets to generate revenue in recent years. The pronounced decline in foreign asset turnover in 2023 may warrant investigation into factors contributing to reduced operational effectiveness in these markets.
Area Asset Turnover: United States
First Solar Inc.; United States; area asset turnover calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Net sales | |||||
| Long-lived assets | |||||
| Area Activity Ratio | |||||
| Area asset turnover1 | |||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Area asset turnover = Net sales ÷ Long-lived assets
= ÷ =
- Net Sales
- Net sales experienced a notable decline from 2,659,940 thousand USD in 2019 to 1,843,433 thousand USD in 2020, reflecting a significant decrease during that period. Following this drop, sales recovered to 2,456,597 thousand USD in 2021 but then slightly decreased again to 2,193,619 thousand USD in 2022. However, by 2023, net sales markedly increased to 3,187,603 thousand USD, reaching the highest level in the observed timeframe. This pattern indicates volatility with an overall upward trend from 2020 onwards.
- Long-lived Assets
- The value of long-lived assets remained relatively stable between 2019 and 2021, fluctuating modestly around the 1 million USD mark (ranging from approximately 1,043,954 to 1,112,369 thousand USD). From 2021 onwards, a substantial increase occurred, with long-lived assets growing to 1,876,218 thousand USD in 2022 and further to 2,734,952 thousand USD in 2023. This demonstrates a significant investment or acquisition of fixed assets in the last two years of the period.
- Area Asset Turnover
- The area asset turnover ratio followed a downward trajectory over the five-year period. Starting at a relatively high ratio of 2.47 in 2019, it declined sharply to 1.77 in 2020, partially recovered to 2.21 in 2021, then dropped significantly to 1.17 in 2022 and remained at 1.17 in 2023. This trend suggests a decreasing efficiency in generating net sales from long-lived assets, particularly after 2021, where increased asset base growth was not matched proportionally by sales growth.
Area Asset Turnover: All other foreign countries
First Solar Inc.; All other foreign countries; area asset turnover calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Net sales | |||||
| Long-lived assets | |||||
| Area Activity Ratio | |||||
| Area asset turnover1 | |||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Area asset turnover = Net sales ÷ Long-lived assets
= ÷ =
- Net Sales
- Net sales exhibited significant fluctuations over the five-year period. Starting at $403,177 thousand in 2019, there was a marked increase in 2020, reaching $867,899 thousand, more than doubling the previous year. However, this upward trend did not persist, as net sales declined sharply in 2021 and 2022 to $466,780 thousand and $425,700 thousand respectively. The most notable change occurred in 2023, where net sales plummeted to $130,999 thousand, representing the lowest level in the observed timeframe.
- Long-lived Assets
- The value of long-lived assets demonstrated a gradual increase from 2019 to 2021, rising from $2,063,364 thousand to $2,277,543 thousand. This represents a steady growth in asset base during the initial period. However, in 2022, there was a considerable reduction to $1,790,219 thousand, a decline of approximately 21% from the previous year. The asset value stabilized in 2023 with a slight increase to $1,792,231 thousand, indicating a halt in asset reduction but no return to prior peak levels.
- Area Asset Turnover Ratio
- The area asset turnover ratio, which measures the efficiency of asset utilization, showed variability in line with sales and asset changes. Beginning at 0.2 in 2019, it increased to 0.39 in 2020, indicating improved efficiency concurrent with increased sales. Subsequently, the ratio dropped back to 0.2 in 2021 but showed some recovery in 2022 to 0.24. In 2023, there was a significant decline to 0.07, reflecting a considerable decrease in sales relative to the asset base, suggesting diminished efficiency in utilizing assets to generate sales.
- Overall Insights
- The data reveals a period of expansion followed by contraction in both sales and asset utilization in the "All other foreign countries" geographic area. The sharp rise in sales in 2020 contrasts with a steady long-lived asset increase until 2021. The subsequent decrease in both sales and long-lived assets indicating potential scaling back or asset divestment. The declining area asset turnover ratio in recent years highlights a loss in operational efficiency, particularly notable in 2023 when sales plunged far more significantly than asset reductions. This divergence suggests challenges in converting asset investments into sales revenue in this segment.
Net sales
First Solar Inc., net sales by geographic area
US$ in thousands
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| United States | |||||
| All other foreign countries | |||||
| Total |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- United States Net Sales
- Net sales in the United States exhibited a fluctuating trend over the analyzed period. Sales decreased significantly from 2,659,940 thousand US dollars in 2019 to 1,843,433 thousand US dollars in 2020. This was followed by a recovery to 2,456,597 thousand US dollars in 2021, then a slight decline to 2,193,619 thousand US dollars in 2022. In 2023, sales increased markedly to reach 3,187,603 thousand US dollars, surpassing all previous years in the dataset.
- All Other Foreign Countries Net Sales
- Net sales in "All other foreign countries" showed considerable volatility. They more than doubled from 403,177 thousand US dollars in 2019 to 867,899 thousand US dollars in 2020. However, this was followed by a sharp decline over the next three years, falling to 466,780 thousand in 2021, then further to 425,700 thousand in 2022, and reaching a low of 130,999 thousand US dollars in 2023. This represents a substantial decrease in foreign sales outside the United States.
- Total Net Sales
- Total net sales mirrored the movements of its geographic components, exhibiting an overall downward trend from 3,063,117 thousand US dollars in 2019 to 2,711,332 thousand US dollars in 2020. Total sales improved in 2021 to 2,923,377 thousand US dollars but declined again to 2,619,319 thousand US dollars in 2022. In 2023, total net sales increased sharply to 3,318,602 thousand US dollars, marking the highest level in the five-year span.
- Summary of Trends and Insights
- The data indicates that the United States market is the primary driver of total net sales, with its sales figures showing greater resilience and eventual growth compared to the foreign markets outside the United States. Foreign sales, after peaking in 2020, experienced a consistent decline through 2023, significantly impacting the total foreign revenue contribution. The rebound in total net sales in 2023 is largely attributable to the substantial growth in the United States sales, which compensated for the weakened performance abroad. This pattern may suggest a strategic or market focus shift toward domestic sales or possible challenges in international markets during the latter years.
Long-lived assets
First Solar Inc., long-lived assets by geographic area
US$ in thousands
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| United States | |||||
| All other foreign countries | |||||
| Total |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- United States Long-Lived Assets
- The value of long-lived assets in the United States demonstrates a consistent upward trend over the period analyzed. Beginning at approximately $1.08 billion in 2019, there is a slight decline in 2020 to around $1.04 billion. This is followed by steady growth each year, reaching approximately $2.73 billion by the end of 2023. The most significant increase occurs between 2021 and 2023, where assets more than double, indicating substantial investment or asset acquisition in the United States during these years.
- All Other Foreign Countries Long-Lived Assets
- The long-lived assets in all other foreign countries show a different pattern. Starting at about $2.06 billion in 2019, there is a modest increase through 2021, reaching approximately $2.28 billion. However, the value then declines notably in 2022 to around $1.79 billion, with a marginal increase in 2023 remaining flat near the same level. This suggests a reduction or divestment of assets abroad after 2021, stabilizing afterward without significant recovery.
- Total Long-Lived Assets
- The aggregate long-lived assets display overall growth from roughly $3.14 billion in 2019 to $4.53 billion in 2023. The total assets increase steadily year-over-year, with the largest growth phase occurring between 2022 and 2023. This overall increase is primarily driven by the substantial rise in U.S. assets, which offsets the decline in foreign assets, highlighting a strategic emphasis on domestic asset accumulation.