Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
First Solar Inc., solvency ratios
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).
The analysis of solvency ratios indicates a generally conservative approach to leverage, characterized by consistently low debt levels relative to equity and assets, although significant volatility is present in debt coverage metrics.
- Debt Leverage Trends
- Debt to equity, debt to capital, and debt to assets ratios exhibited a consistent downward trend from 2019 through 2022, reaching minimums of 0.03, 0.03, and 0.02 respectively. This suggests a period of deleveraging or accelerated equity growth. However, a reversal occurred in 2023, with these ratios increasing to 0.09, 0.08, and 0.06, returning to levels similar to those observed in 2019.
- Impact of Operating Lease Liabilities
- The inclusion of operating lease liabilities consistently elevates solvency ratios across all metrics. The gap between standard debt ratios and those including lease liabilities narrowed significantly over the period; for instance, the difference in the debt to equity ratio decreased from 0.03 in 2019 to 0.01 in 2022, before widening slightly again to 0.00 in 2023, indicating a fluctuating relative weight of lease obligations within the capital structure.
- Financial Leverage
- Financial leverage followed a U-shaped trajectory, declining from 1.47 in 2019 to a low of 1.24 in 2021. Subsequently, leverage increased steadily, reaching a period peak of 1.55 by December 31, 2023. This indicates a recent increase in the proportion of total assets financed by liabilities relative to shareholders' equity.
- Debt Servicing and Coverage Capacity
- Interest and fixed charge coverage ratios demonstrate extreme volatility. After recording negative values in 2019, both metrics saw a sharp increase in 2021, followed by a significant contraction in 2022, where the interest coverage ratio fell to 1.70. By 2023, a substantial recovery was observed, with interest coverage rising to 69.75 and fixed charge coverage reaching 36.57, signaling a vastly improved capacity to service debt and fixed obligations from operating earnings.
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Debt to Equity
First Solar Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of debt | 96,238) | —) | 3,896) | 41,540) | 17,510) | |
| Finance lease liabilities, current | 51) | —) | —) | —) | —) | |
| Long-term debt, noncurrent portion | 464,068) | 184,349) | 236,005) | 237,691) | 454,187) | |
| Finance lease liabilities, noncurrent | 17,063) | —) | —) | —) | —) | |
| Total debt | 577,420) | 184,349) | 239,901) | 279,231) | 471,697) | |
| Stockholders’ equity | 6,687,469) | 5,836,055) | 5,959,551) | 5,520,928) | 5,096,767) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.09 | 0.03 | 0.04 | 0.05 | 0.09 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.04 | 0.05 | 0.04 | — | — | |
| Analog Devices Inc. | 0.20 | 0.18 | 0.18 | 0.43 | — | |
| Applied Materials Inc. | 0.35 | 0.45 | 0.45 | 0.52 | — | |
| Broadcom Inc. | 1.64 | 1.74 | 1.59 | 1.72 | — | |
| Intel Corp. | 0.47 | 0.41 | 0.40 | — | — | |
| KLA Corp. | 2.02 | 4.75 | 1.02 | — | — | |
| Lam Research Corp. | 0.61 | 0.80 | 0.83 | — | — | |
| Marvell Technology Inc. | 0.29 | 0.29 | 0.14 | — | — | |
| Micron Technology Inc. | 0.30 | 0.14 | 0.15 | — | — | |
| NVIDIA Corp. | 0.50 | 0.41 | 0.41 | — | — | |
| Qualcomm Inc. | 0.71 | 0.86 | 1.58 | 2.59 | — | |
| Texas Instruments Inc. | 0.66 | 0.60 | 0.58 | — | — | |
| Debt to Equity, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.46 | 0.43 | 0.49 | — | — | |
| Debt to Equity, Industry | ||||||
| Information Technology | 0.66 | 0.70 | 0.83 | — | — | |
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
Debt to equity = Total debt ÷ Stockholders’ equity
= 577,420 ÷ 6,687,469 = 0.09
2 Click competitor name to see calculations.
The organization's solvency profile from 2019 to 2023 is characterized by a period of consistent deleveraging followed by a significant increase in debt obligations in the final year. Throughout the observed period, a conservative capital structure was maintained, demonstrating a low reliance on borrowed funds relative to the equity base.
- Total Debt Trends
- A steady decline in total debt was observed from December 31, 2019, through December 31, 2022, with obligations falling from US$ 471,697 thousand to a period low of US$ 184,349 thousand. This downward trend reversed sharply in 2023, as total debt increased to US$ 577,420 thousand, representing the highest debt level recorded within the five-year analysis window.
- Stockholders’ Equity Evolution
- Equity demonstrated a general upward trajectory, growing from US$ 5,096,767 thousand in 2019 to US$ 6,687,469 thousand by the end of 2023. While a marginal contraction occurred in 2022, the overall expansion of the equity base has strengthened the company's financial position and provided a substantial cushion against its total liabilities.
- Debt to Equity Ratio Analysis
- The debt to equity ratio mirrored the deleveraging phase between 2019 and 2022, compressing from 0.09 to a minimum of 0.03. The substantial increase in borrowing in 2023 caused the ratio to return to 0.09. Despite this recent uptick, the ratio remains objectively low, indicating that the company continues to finance its operations and growth primarily through equity rather than debt.
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Debt to Equity (including Operating Lease Liability)
First Solar Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of debt | 96,238) | —) | 3,896) | 41,540) | 17,510) | |
| Finance lease liabilities, current | 51) | —) | —) | —) | —) | |
| Long-term debt, noncurrent portion | 464,068) | 184,349) | 236,005) | 237,691) | 454,187) | |
| Finance lease liabilities, noncurrent | 17,063) | —) | —) | —) | —) | |
| Total debt | 577,420) | 184,349) | 239,901) | 279,231) | 471,697) | |
| Operating lease liabilities, current | 10,307) | 9,193) | 12,781) | 14,006) | 11,102) | |
| Operating lease liabilities, noncurrent | 36,662) | 40,589) | 145,912) | 189,034) | 112,515) | |
| Total debt (including operating lease liability) | 624,389) | 234,131) | 398,594) | 482,271) | 595,314) | |
| Stockholders’ equity | 6,687,469) | 5,836,055) | 5,959,551) | 5,520,928) | 5,096,767) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.09 | 0.04 | 0.07 | 0.09 | 0.12 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.06 | 0.05 | 0.10 | — | — | |
| Analog Devices Inc. | 0.21 | 0.19 | 0.19 | 0.46 | — | |
| Applied Materials Inc. | 0.37 | 0.48 | 0.47 | 0.54 | — | |
| Broadcom Inc. | 1.65 | 1.76 | 1.61 | 1.75 | — | |
| Intel Corp. | 0.47 | 0.42 | 0.40 | — | — | |
| KLA Corp. | 2.08 | 4.83 | 1.05 | — | — | |
| Lam Research Corp. | 0.64 | 0.83 | 0.86 | — | — | |
| Marvell Technology Inc. | 0.30 | 0.30 | 0.16 | — | — | |
| NVIDIA Corp. | 0.54 | 0.44 | 0.46 | — | — | |
| Qualcomm Inc. | 0.74 | 0.90 | 1.64 | 2.67 | — | |
| Texas Instruments Inc. | 0.70 | 0.63 | 0.62 | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.47 | 0.44 | 0.51 | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.72 | 0.76 | 0.90 | — | — | |
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
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 624,389 ÷ 6,687,469 = 0.09
2 Click competitor name to see calculations.
The organization's solvency profile is characterized by a period of consistent deleveraging through 2022, followed by a notable increase in liabilities in 2023, all while maintaining a strong and expanding equity base.
- Stockholders' Equity Evolution
- Equity demonstrated a general upward trend over the five-year period, rising from US$ 5,096,767 thousand in 2019 to US$ 6,687,469 thousand by the end of 2023. A marginal decline was noted in 2022, which was subsequently reversed by a significant increase in 2023, strengthening the overall capital cushion.
- Debt Obligations Trend
- Total debt, inclusive of operating lease liabilities, underwent a steady contraction from 2019 to 2022, decreasing from US$ 595,314 thousand to a period low of US$ 234,131 thousand. This downward trajectory was interrupted in 2023, where debt rose sharply to US$ 624,389 thousand, representing the highest debt level recorded within the analyzed timeframe.
- Debt-to-Equity Ratio Analysis
- The debt-to-equity ratio reflected the inverse relationship between growing equity and declining debt from 2019 to 2022, dropping from 0.12 to 0.04. Although the ratio increased to 0.09 in 2023 due to the spike in total debt, the figure remains well below the 2019 baseline. This indicates a conservative approach to leverage and a high degree of solvency, as the company continues to fund its operations primarily through equity rather than debt.
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Debt to Capital
First Solar Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of debt | 96,238) | —) | 3,896) | 41,540) | 17,510) | |
| Finance lease liabilities, current | 51) | —) | —) | —) | —) | |
| Long-term debt, noncurrent portion | 464,068) | 184,349) | 236,005) | 237,691) | 454,187) | |
| Finance lease liabilities, noncurrent | 17,063) | —) | —) | —) | —) | |
| Total debt | 577,420) | 184,349) | 239,901) | 279,231) | 471,697) | |
| Stockholders’ equity | 6,687,469) | 5,836,055) | 5,959,551) | 5,520,928) | 5,096,767) | |
| Total capital | 7,264,889) | 6,020,404) | 6,199,452) | 5,800,159) | 5,568,464) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.08 | 0.03 | 0.04 | 0.05 | 0.08 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.04 | 0.04 | 0.04 | — | — | |
| Analog Devices Inc. | 0.16 | 0.15 | 0.15 | 0.30 | — | |
| Applied Materials Inc. | 0.26 | 0.31 | 0.31 | 0.34 | — | |
| Broadcom Inc. | 0.62 | 0.64 | 0.61 | 0.63 | — | |
| Intel Corp. | 0.32 | 0.29 | 0.29 | — | — | |
| KLA Corp. | 0.67 | 0.83 | 0.50 | — | — | |
| Lam Research Corp. | 0.38 | 0.44 | 0.45 | — | — | |
| Marvell Technology Inc. | 0.22 | 0.22 | 0.12 | — | — | |
| Micron Technology Inc. | 0.23 | 0.12 | 0.13 | — | — | |
| NVIDIA Corp. | 0.33 | 0.29 | 0.29 | — | — | |
| Qualcomm Inc. | 0.42 | 0.46 | 0.61 | 0.72 | — | |
| Texas Instruments Inc. | 0.40 | 0.37 | 0.37 | — | — | |
| Debt to Capital, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.32 | 0.30 | 0.33 | — | — | |
| Debt to Capital, Industry | ||||||
| Information Technology | 0.40 | 0.41 | 0.45 | — | — | |
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
Debt to capital = Total debt ÷ Total capital
= 577,420 ÷ 7,264,889 = 0.08
2 Click competitor name to see calculations.
The solvency profile from 2019 to 2023 is characterized by a period of consistent deleveraging followed by a significant increase in debt obligations in the final year of the analyzed period.
- Total Debt Trends
- A continuous reduction in total debt was observed between 2019 and 2022, with obligations falling from $471.7 million to a period low of $184.3 million. This downward trajectory was reversed in 2023, when total debt increased sharply to $577.4 million, representing the highest debt level within the five-year span.
- Total Capital Movements
- Total capital exhibited a general upward trend, growing from $5.57 billion in 2019 to $7.26 billion by 2023. A minor contraction occurred in 2022, but the overall growth indicates a substantial expansion of the total capital base over the period.
- Debt to Capital Ratio Analysis
- The debt to capital ratio mirrored the movement of total debt, declining from 0.08 in 2019 to a minimum of 0.03 in 2022. In 2023, the ratio returned to 0.08. This progression indicates that while the company aggressively reduced its leverage for several years, it returned to its 2019 leverage level in 2023. Despite the recent increase, the overall ratio suggests a conservative capital structure with low reliance on debt relative to total capital.
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Debt to Capital (including Operating Lease Liability)
First Solar Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of debt | 96,238) | —) | 3,896) | 41,540) | 17,510) | |
| Finance lease liabilities, current | 51) | —) | —) | —) | —) | |
| Long-term debt, noncurrent portion | 464,068) | 184,349) | 236,005) | 237,691) | 454,187) | |
| Finance lease liabilities, noncurrent | 17,063) | —) | —) | —) | —) | |
| Total debt | 577,420) | 184,349) | 239,901) | 279,231) | 471,697) | |
| Operating lease liabilities, current | 10,307) | 9,193) | 12,781) | 14,006) | 11,102) | |
| Operating lease liabilities, noncurrent | 36,662) | 40,589) | 145,912) | 189,034) | 112,515) | |
| Total debt (including operating lease liability) | 624,389) | 234,131) | 398,594) | 482,271) | 595,314) | |
| Stockholders’ equity | 6,687,469) | 5,836,055) | 5,959,551) | 5,520,928) | 5,096,767) | |
| Total capital (including operating lease liability) | 7,311,858) | 6,070,186) | 6,358,145) | 6,003,199) | 5,692,081) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.09 | 0.04 | 0.06 | 0.08 | 0.10 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.05 | 0.05 | 0.09 | — | — | |
| Analog Devices Inc. | 0.17 | 0.16 | 0.16 | 0.31 | — | |
| Applied Materials Inc. | 0.27 | 0.32 | 0.32 | 0.35 | — | |
| Broadcom Inc. | 0.62 | 0.64 | 0.62 | 0.64 | — | |
| Intel Corp. | 0.32 | 0.30 | 0.29 | — | — | |
| KLA Corp. | 0.67 | 0.83 | 0.51 | — | — | |
| Lam Research Corp. | 0.39 | 0.45 | 0.46 | — | — | |
| Marvell Technology Inc. | 0.23 | 0.23 | 0.14 | — | — | |
| NVIDIA Corp. | 0.35 | 0.31 | 0.31 | — | — | |
| Qualcomm Inc. | 0.43 | 0.47 | 0.62 | 0.73 | — | |
| Texas Instruments Inc. | 0.41 | 0.39 | 0.38 | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.32 | 0.31 | 0.34 | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.42 | 0.43 | 0.47 | — | — | |
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
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 624,389 ÷ 7,311,858 = 0.09
2 Click competitor name to see calculations.
The solvency profile from 2019 to 2023 is characterized by a period of consistent deleveraging followed by a significant increase in liabilities in the final year. Between 2019 and 2022, there was a sustained reduction in the reliance on debt to fund capital, a trend that was reversed in 2023 as both debt and total capital expanded.
- Total Debt Trajectory
- Total debt, including operating lease liabilities, exhibited a steady decline for four consecutive years, falling from US$ 595.3 million in 2019 to a low of US$ 234.1 million in 2022. This downward trend was sharply interrupted in 2023, when total debt surged to US$ 624.4 million, representing the highest debt level within the observed five-year period.
- Total Capital Composition
- Total capital demonstrated a general upward trajectory, growing from US$ 5.69 billion in 2019 to US$ 7.31 billion by 2023. Despite a moderate contraction to US$ 6.07 billion in 2022, the overall growth in the capital base suggests an expansion of the company's financial resources, which remained robust even during the period of debt reduction.
- Debt to Capital Ratio Analysis
- The debt to capital ratio reflects a strategic shift in financial leverage, decreasing from 0.10 in 2019 to a minimum of 0.04 in 2022. This contraction indicates a strengthened solvency position and reduced financial risk. However, the ratio rose to 0.09 in 2023, nearly returning to the 2019 baseline, driven by the substantial increase in total debt obligations relative to the growth in total capital.
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Debt to Assets
First Solar Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of debt | 96,238) | —) | 3,896) | 41,540) | 17,510) | |
| Finance lease liabilities, current | 51) | —) | —) | —) | —) | |
| Long-term debt, noncurrent portion | 464,068) | 184,349) | 236,005) | 237,691) | 454,187) | |
| Finance lease liabilities, noncurrent | 17,063) | —) | —) | —) | —) | |
| Total debt | 577,420) | 184,349) | 239,901) | 279,231) | 471,697) | |
| Total assets | 10,365,132) | 8,251,228) | 7,413,746) | 7,108,931) | 7,515,689) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.06 | 0.02 | 0.03 | 0.04 | 0.06 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.04 | 0.04 | 0.03 | — | — | |
| Analog Devices Inc. | 0.14 | 0.13 | 0.13 | 0.24 | — | |
| Applied Materials Inc. | 0.18 | 0.20 | 0.21 | 0.24 | — | |
| Broadcom Inc. | 0.54 | 0.54 | 0.53 | 0.54 | — | |
| Intel Corp. | 0.26 | 0.23 | 0.23 | — | — | |
| KLA Corp. | 0.42 | 0.53 | 0.34 | — | — | |
| Lam Research Corp. | 0.27 | 0.29 | 0.31 | — | — | |
| Marvell Technology Inc. | 0.20 | 0.21 | 0.11 | — | — | |
| Micron Technology Inc. | 0.21 | 0.10 | 0.12 | — | — | |
| NVIDIA Corp. | 0.27 | 0.25 | 0.24 | — | — | |
| Qualcomm Inc. | 0.30 | 0.32 | 0.38 | 0.44 | — | |
| Texas Instruments Inc. | 0.35 | 0.32 | 0.31 | — | — | |
| Debt to Assets, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.26 | 0.24 | 0.26 | — | — | |
| Debt to Assets, Industry | ||||||
| Information Technology | 0.26 | 0.26 | 0.29 | — | — | |
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
Debt to assets = Total debt ÷ Total assets
= 577,420 ÷ 10,365,132 = 0.06
2 Click competitor name to see calculations.
The solvency profile between 2019 and 2023 is characterized by a period of consistent deleveraging followed by a significant increase in debt obligations in the final year of the analyzed period.
- Total Debt Evolution
- A steady downward trend in total debt was observed from 2019 through 2022, with obligations decreasing from US$ 471.7 million to a low of US$ 184.3 million. This trajectory shifted abruptly in 2023, as total debt rose to US$ 577.4 million, marking the highest debt level recorded in the five-year span.
- Total Asset Growth
- Total assets experienced a slight contraction in 2020 but subsequently entered a growth phase. Assets increased from US$ 7.1 billion in 2020 to US$ 10.4 billion by December 31, 2023, demonstrating a substantial expansion of the company's asset base, particularly in the final two years.
- Debt to Assets Ratio Trends
- The debt to assets ratio declined progressively from 0.06 in 2019 to 0.02 in 2022, indicating a systematic reduction in financial leverage and an improved solvency position. However, this ratio returned to 0.06 in 2023, as the increase in total debt outpaced the growth in total assets during that period.
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Debt to Assets (including Operating Lease Liability)
First Solar Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of debt | 96,238) | —) | 3,896) | 41,540) | 17,510) | |
| Finance lease liabilities, current | 51) | —) | —) | —) | —) | |
| Long-term debt, noncurrent portion | 464,068) | 184,349) | 236,005) | 237,691) | 454,187) | |
| Finance lease liabilities, noncurrent | 17,063) | —) | —) | —) | —) | |
| Total debt | 577,420) | 184,349) | 239,901) | 279,231) | 471,697) | |
| Operating lease liabilities, current | 10,307) | 9,193) | 12,781) | 14,006) | 11,102) | |
| Operating lease liabilities, noncurrent | 36,662) | 40,589) | 145,912) | 189,034) | 112,515) | |
| Total debt (including operating lease liability) | 624,389) | 234,131) | 398,594) | 482,271) | 595,314) | |
| Total assets | 10,365,132) | 8,251,228) | 7,413,746) | 7,108,931) | 7,515,689) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.06 | 0.03 | 0.05 | 0.07 | 0.08 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.05 | 0.04 | 0.06 | — | — | |
| Analog Devices Inc. | 0.15 | 0.14 | 0.14 | 0.25 | — | |
| Applied Materials Inc. | 0.20 | 0.22 | 0.22 | 0.26 | — | |
| Broadcom Inc. | 0.54 | 0.55 | 0.53 | 0.55 | — | |
| Intel Corp. | 0.26 | 0.23 | 0.23 | — | — | |
| KLA Corp. | 0.43 | 0.54 | 0.35 | — | — | |
| Lam Research Corp. | 0.28 | 0.30 | 0.33 | — | — | |
| Marvell Technology Inc. | 0.21 | 0.21 | 0.12 | — | — | |
| NVIDIA Corp. | 0.29 | 0.27 | 0.27 | — | — | |
| Qualcomm Inc. | 0.31 | 0.33 | 0.40 | 0.46 | — | |
| Texas Instruments Inc. | 0.36 | 0.34 | 0.33 | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.27 | 0.25 | 0.27 | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.28 | 0.29 | 0.31 | — | — | |
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
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 624,389 ÷ 10,365,132 = 0.06
2 Click competitor name to see calculations.
The solvency profile from 2019 to 2023 reveals a period of consistent deleveraging followed by a strategic increase in liabilities in the final year. The overall financial position is characterized by low leverage and a strong asset-to-debt relationship, maintaining a conservative capital structure throughout the analyzed period.
- Total Debt Trends
- Total debt, including operating lease liabilities, experienced a steady decline between 2019 and 2022, falling from US$ 595.3 million to a period low of US$ 234.1 million. This downward trajectory was reversed in 2023, with total debt increasing significantly to US$ 624.4 million.
- Asset Base Expansion
- Total assets demonstrated a general upward trend, expanding from US$ 7.5 billion in 2019 to US$ 10.4 billion by the end of 2023. While a marginal contraction was observed in 2020, assets grew aggressively between 2021 and 2023, increasing the overall scale of the balance sheet.
- Debt to Assets Ratio Analysis
- The debt to assets ratio decreased progressively from 0.08 in 2019 to 0.03 in 2022, reflecting a reduction in financial risk and a diminished reliance on borrowed funds. Although the ratio rose to 0.06 in 2023 due to the spike in total debt, the concurrent expansion of the asset base moderated this increase. The 2023 ratio remains below the 2019 level, indicating that solvency remains robust despite the recent increase in liabilities.
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Financial Leverage
First Solar Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Total assets | 10,365,132) | 8,251,228) | 7,413,746) | 7,108,931) | 7,515,689) | |
| Stockholders’ equity | 6,687,469) | 5,836,055) | 5,959,551) | 5,520,928) | 5,096,767) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 1.55 | 1.41 | 1.24 | 1.29 | 1.47 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 1.21 | 1.23 | 1.66 | — | — | |
| Analog Devices Inc. | 1.37 | 1.38 | 1.38 | 1.79 | — | |
| Applied Materials Inc. | 1.88 | 2.19 | 2.11 | 2.11 | — | |
| Broadcom Inc. | 3.04 | 3.23 | 3.03 | 3.18 | — | |
| Intel Corp. | 1.81 | 1.80 | 1.77 | — | — | |
| KLA Corp. | 4.82 | 8.99 | 3.04 | — | — | |
| Lam Research Corp. | 2.29 | 2.74 | 2.64 | — | — | |
| Marvell Technology Inc. | 1.44 | 1.41 | 1.28 | — | — | |
| Micron Technology Inc. | 1.46 | 1.33 | 1.34 | — | — | |
| NVIDIA Corp. | 1.86 | 1.66 | 1.70 | — | — | |
| Qualcomm Inc. | 2.37 | 2.72 | 4.14 | 5.86 | — | |
| Texas Instruments Inc. | 1.91 | 1.87 | 1.85 | — | — | |
| Financial Leverage, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 1.78 | 1.77 | 1.87 | — | — | |
| Financial Leverage, Industry | ||||||
| Information Technology | 2.53 | 2.65 | 2.87 | — | — | |
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
Financial leverage = Total assets ÷ Stockholders’ equity
= 10,365,132 ÷ 6,687,469 = 1.55
2 Click competitor name to see calculations.
The financial position of the company between 2019 and 2023 is characterized by a significant expansion of the asset base and a fluctuating trend in financial leverage. While total assets and stockholders' equity both increased over the five-year period, the rate of asset growth outpaced equity growth in the final two years, leading to an increase in the company's leverage ratio.
- Total Assets Trend
- Total assets experienced an initial contraction in 2020, decreasing from approximately 7.52 billion USD to 7.11 billion USD. However, a consistent growth trajectory followed, with assets rising to 7.41 billion USD in 2021, 8.25 billion USD in 2022, and peaking at 10.37 billion USD by December 31, 2023. This represents a substantial increase in the total resource base toward the end of the analyzed period.
- Stockholders' Equity Analysis
- Equity demonstrated a generally positive trend, growing from 5.10 billion USD in 2019 to 6.69 billion USD in 2023. A slight decline was observed in 2022, where equity dropped to 5.84 billion USD from 5.96 billion USD the previous year. Despite this temporary dip, the long-term trend indicates a strengthening of the company's internal funding and retained earnings.
- Financial Leverage Dynamics
- The financial leverage ratio followed a U-shaped trajectory over the five-year window. From 2019 to 2021, the ratio declined from 1.47 to a low of 1.24, suggesting a period of deleveraging or a higher reliance on equity relative to total assets. This trend reversed in 2022 and 2023, with the ratio climbing to 1.41 and then to 1.55, respectively. The increase in the final two years indicates that asset expansion was funded more heavily by liabilities than by equity during this phase.
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Interest Coverage
First Solar Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income (loss) | 830,777) | (44,166) | 468,693) | 398,355) | (114,933) | |
| Add: Income tax expense | 60,513) | 52,764) | 103,469) | (107,294) | (5,480) | |
| Add: Interest expense, net | 12,965) | 12,225) | 13,107) | 24,036) | 27,066) | |
| Earnings before interest and tax (EBIT) | 904,255) | 20,823) | 585,269) | 315,097) | (93,347) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 69.75 | 1.70 | 44.65 | 13.11 | -3.45 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 5.79 | 14.61 | 109.09 | — | — | |
| Analog Devices Inc. | 14.63 | 16.46 | 8.19 | 7.79 | — | |
| Applied Materials Inc. | 33.42 | 34.33 | 29.69 | 18.36 | — | |
| Broadcom Inc. | 10.31 | 8.16 | 4.59 | 2.37 | — | |
| Intel Corp. | 1.87 | 16.66 | 37.35 | — | — | |
| KLA Corp. | 13.76 | 22.76 | 16.00 | — | — | |
| Lam Research Corp. | 28.40 | 29.11 | 21.95 | — | — | |
| Marvell Technology Inc. | 1.50 | -2.47 | -3.65 | — | — | |
| Micron Technology Inc. | -13.58 | 51.66 | 35.18 | — | — | |
| NVIDIA Corp. | 16.96 | 43.12 | 24.96 | — | — | |
| Qualcomm Inc. | 11.72 | 31.61 | 19.38 | 10.50 | — | |
| Texas Instruments Inc. | 22.01 | 47.88 | 49.47 | — | — | |
| Interest Coverage, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 10.17 | 20.45 | 18.07 | — | — | |
| Interest Coverage, Industry | ||||||
| Information Technology | 17.37 | 22.18 | 19.66 | — | — | |
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
Interest coverage = EBIT ÷ Interest expense
= 904,255 ÷ 12,965 = 69.75
2 Click competitor name to see calculations.
The solvency profile regarding interest coverage demonstrates significant volatility between 2019 and 2023, characterized by an initial recovery from operational losses, a sharp temporary decline in 2022, and a final surge to record levels of coverage by the end of the period.
- Earnings Before Interest and Tax (EBIT) Trends
- Operational profitability has been highly inconsistent. A significant deficit of US$ 93.3 million in 2019 transitioned into a period of growth, peaking at US$ 585.3 million in 2021. A substantial contraction occurred in 2022, where EBIT fell to US$ 20.8 million, before rebounding sharply to a five-year high of US$ 904.3 million in 2023.
- Interest Expense Trajectory
- Net interest expenses have followed a general downward trend, decreasing from US$ 27.1 million in 2019 to a stabilized range between US$ 12.2 million and US$ 13.1 million from 2021 through 2023. This reduction in fixed financial obligations has enhanced the organization's capacity to absorb fluctuations in operating income.
- Interest Coverage Ratio Analysis
- The interest coverage ratio reflects the volatility of EBIT. In 2019, the ratio was negative (-3.45), indicating an inability to meet interest obligations from operating profits. This improved dramatically to 44.65 in 2021. While the ratio plummeted to 1.70 in 2022—representing a narrow margin of safety—it reached an exceptional peak of 69.75 in 2023, suggesting an extremely strong ability to service debt.
The correlation between EBIT and the interest coverage ratio is nearly absolute, as interest expenses remained relatively flat during the latter three years of the analyzed period. The current position indicates a robust solvency cushion, far exceeding the precarious levels observed in 2019 and 2022.
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Fixed Charge Coverage
First Solar Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income (loss) | 830,777) | (44,166) | 468,693) | 398,355) | (114,933) | |
| Add: Income tax expense | 60,513) | 52,764) | 103,469) | (107,294) | (5,480) | |
| Add: Interest expense, net | 12,965) | 12,225) | 13,107) | 24,036) | 27,066) | |
| Earnings before interest and tax (EBIT) | 904,255) | 20,823) | 585,269) | 315,097) | (93,347) | |
| Add: Operating lease cost | 12,090) | 14,634) | 17,681) | 18,739) | 21,833) | |
| Earnings before fixed charges and tax | 916,345) | 35,457) | 602,950) | 333,836) | (71,514) | |
| Interest expense, net | 12,965) | 12,225) | 13,107) | 24,036) | 27,066) | |
| Operating lease cost | 12,090) | 14,634) | 17,681) | 18,739) | 21,833) | |
| Fixed charges | 25,055) | 26,859) | 30,788) | 42,775) | 48,899) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 36.57 | 1.32 | 19.58 | 7.80 | -1.46 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 3.18 | 6.82 | 36.00 | — | — | |
| Analog Devices Inc. | 11.89 | 12.87 | 6.64 | 6.48 | — | |
| Applied Materials Inc. | 23.69 | 24.67 | 22.50 | 14.48 | — | |
| Broadcom Inc. | 9.81 | 6.55 | 3.70 | 1.92 | — | |
| Intel Corp. | 1.59 | 7.34 | 16.56 | — | — | |
| KLA Corp. | 12.19 | 18.72 | 13.03 | — | — | |
| Lam Research Corp. | 20.49 | 21.44 | 17.80 | — | — | |
| Marvell Technology Inc. | 1.39 | -1.40 | -1.75 | — | — | |
| NVIDIA Corp. | 10.19 | 25.61 | 14.40 | — | — | |
| Qualcomm Inc. | 9.29 | 22.52 | 14.48 | 8.30 | — | |
| Texas Instruments Inc. | 18.41 | 36.70 | 36.25 | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 8.27 | 14.17 | 12.68 | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Information Technology | 11.23 | 13.28 | 12.13 | — | — | |
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
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 916,345 ÷ 25,055 = 36.57
2 Click competitor name to see calculations.
The solvency profile demonstrates a significant overall improvement in the capacity to meet fixed obligations over the five-year period ending December 31, 2023. The organization transitioned from a position of negative coverage in 2019 to a robust solvency position by 2023, characterized by high earnings volatility offset by a consistent reduction in fixed financial burdens.
- Earnings before fixed charges and tax
- Earnings exhibited substantial volatility throughout the period. A net loss of 71.5 million USD in 2019 was followed by a strong recovery, peaking at 602.9 million USD in 2021. A sharp contraction occurred in 2022, with earnings dropping to 35.5 million USD, before a significant surge to a period high of 916.3 million USD in 2023.
- Fixed charges
- A consistent downward trend is observed in fixed charges, which declined steadily from 48.9 million USD in 2019 to 25.1 million USD in 2023. This persistent decrease indicates a systematic reduction in the company's fixed financial obligations over the analyzed timeframe.
- Fixed charge coverage ratio
- The coverage ratio mirrors the interplay between fluctuating earnings and decreasing fixed charges. The ratio improved from -1.46 in 2019 to 19.58 in 2021. Despite a critical decline to 1.32 in 2022—driven by the contraction in earnings—the ratio reached an exceptional peak of 36.57 in 2023, signaling a very high margin of safety and strong solvency.
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