Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Long-term Activity Ratios (Summary)
First Solar Inc., long-term (investment) activity 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 long-term activity ratios indicates a general decline in asset utilization efficiency from 2019 through 2022, followed by a period of stabilization in 2023. The most significant contraction is observed in the efficiency of fixed assets, suggesting that the growth in the asset base has outpaced the growth in generated revenue during this period.
- Fixed Asset Utilization
- A pronounced downward trend is evident in the net fixed asset turnover, which decreased from 1.40 in 2019 to 0.75 by 2023. A sharp decline occurred between 2021 and 2022, where the ratio dropped from 1.10 to 0.74. This pattern is mirrored in the ratio including operating lease right-of-use assets, which fell from 1.32 in 2019 to 0.74 in 2023. The close correlation between these two metrics indicates that the decline in efficiency is driven by core fixed asset investments rather than leasing arrangements.
- Total Asset Efficiency
- The total asset turnover ratio exhibits a steady decrease, moving from 0.41 in 2019 to 0.32 in 2022 and 2023. This suggests a systemic reduction in the company's ability to generate sales from its total investment base. The stagnation of this ratio at 0.32 over the final two years indicates that the efficiency of the overall asset portfolio has reached a plateau.
- Equity Utilization
- Equity turnover decreased from 0.60 in 2019 to a low of 0.45 in 2022. Unlike the total asset turnover, equity turnover showed a modest recovery in 2023, rising to 0.50. While the overall trend remains lower than 2019 levels, the recent uptick suggests an improvement in the efficiency of utilizing shareholders' equity to drive revenue.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Net Fixed Asset Turnover
First Solar Inc., net fixed asset turnover 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 sales | 3,318,602) | 2,619,319) | 2,923,377) | 2,711,332) | 3,063,117) | |
| Property, plant and equipment, net, including finance lease assets | 4,414,334) | 3,536,902) | 2,649,587) | 2,402,285) | 2,181,149) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 0.75 | 0.74 | 1.10 | 1.13 | 1.40 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 14.27 | 15.60 | 23.41 | — | — | |
| Analog Devices Inc. | 3.82 | 5.00 | 3.70 | 5.00 | — | |
| Applied Materials Inc. | 9.37 | 11.18 | 11.93 | 10.72 | — | |
| Broadcom Inc. | 16.63 | 14.94 | 11.69 | 9.52 | — | |
| Intel Corp. | 0.56 | 0.78 | 1.25 | — | — | |
| KLA Corp. | 10.17 | 10.84 | 10.44 | — | — | |
| Lam Research Corp. | 9.39 | 10.46 | 11.22 | — | — | |
| Marvell Technology Inc. | 10.25 | 9.64 | 9.10 | — | — | |
| Micron Technology Inc. | 0.41 | 0.80 | 0.83 | — | — | |
| NVIDIA Corp. | 7.09 | 9.69 | 7.76 | — | — | |
| Qualcomm Inc. | 7.10 | 8.55 | 7.36 | 6.34 | — | |
| Texas Instruments Inc. | 1.75 | 2.91 | 3.57 | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 1.69 | 2.13 | 2.33 | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Information Technology | 3.80 | 4.46 | 4.76 | — | — | |
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
Net fixed asset turnover = Net sales ÷ Property, plant and equipment, net, including finance lease assets
= 3,318,602 ÷ 4,414,334 = 0.75
2 Click competitor name to see calculations.
A comprehensive analysis of long-term investment activity reveals a significant decline in asset utilization efficiency between 2019 and 2023. While the organization has aggressively expanded its fixed asset base, revenue growth has not scaled at a proportional rate, resulting in a diminished capacity to generate sales from its net property, plant, and equipment.
- Net Fixed Asset Turnover Trend
- The net fixed asset turnover ratio exhibits a consistent downward trajectory, falling from 1.40 in 2019 to 0.75 by the end of 2023. This decline indicates that each dollar invested in net fixed assets is producing progressively fewer dollars in net sales. The most significant contraction occurred between 2021 and 2022, where the ratio dropped from 1.10 to 0.74, marking a substantial reduction in operational efficiency regarding fixed asset productivity.
- Capital Expenditure and Asset Growth
- Net property, plant, and equipment increased monotonically throughout the period, rising from 2,181,149 thousand US dollars in 2019 to 4,414,334 thousand US dollars in 2023. This represents a total increase of approximately 102% over five years, reflecting a strategy of heavy capital investment and capacity expansion.
- Revenue Correlation and Utilization
- Net sales demonstrated volatility during the analyzed period, experiencing declines in 2020 and 2022 before reaching a peak of 3,318,602 thousand US dollars in 2023. The divergence between continuous asset growth and fluctuating revenue streams is the primary driver of the declining turnover ratio. While the recovery in net sales in 2023 led to a marginal stabilization of the turnover ratio at 0.75, the efficiency of the fixed asset base remains nearly 46% lower than the level observed in 2019.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
First Solar Inc., net fixed asset turnover (including operating lease, right-of-use asset) 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 sales | 3,318,602) | 2,619,319) | 2,923,377) | 2,711,332) | 3,063,117) | |
| Property, plant and equipment, net, including finance lease assets | 4,414,334) | 3,536,902) | 2,649,587) | 2,402,285) | 2,181,149) | |
| Operating lease assets | 84,419) | 93,185) | 207,544) | 226,664) | 145,711) | |
| Property, plant and equipment, net, including finance lease assets (including operating lease, right-of-use asset) | 4,498,753) | 3,630,087) | 2,857,131) | 2,628,949) | 2,326,860) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 0.74 | 0.72 | 1.02 | 1.03 | 1.32 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Advanced Micro Devices Inc. | 10.21 | 11.96 | 15.37 | — | — | |
| Analog Devices Inc. | 3.52 | 4.51 | 3.24 | 4.07 | — | |
| Applied Materials Inc. | 8.28 | 9.56 | 10.35 | 9.27 | — | |
| Broadcom Inc. | 13.69 | 12.12 | 9.35 | 7.71 | — | |
| Intel Corp. | 0.56 | 0.78 | 1.24 | — | — | |
| KLA Corp. | 8.46 | 9.43 | 9.03 | — | — | |
| Lam Research Corp. | 8.30 | 9.19 | 9.90 | — | — | |
| Marvell Technology Inc. | 7.51 | 7.38 | 6.94 | — | — | |
| NVIDIA Corp. | 5.57 | 7.46 | 5.84 | — | — | |
| Qualcomm Inc. | 6.34 | 7.62 | 6.62 | 5.64 | — | |
| Texas Instruments Inc. | 1.66 | 2.74 | 3.27 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Semiconductors & Semiconductor Equipment | 1.64 | 2.07 | 2.25 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Information Technology | 3.34 | 3.87 | 4.04 | — | — | |
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
Net fixed asset turnover (including operating lease, right-of-use asset) = Net sales ÷ Property, plant and equipment, net, including finance lease assets (including operating lease, right-of-use asset)
= 3,318,602 ÷ 4,498,753 = 0.74
2 Click competitor name to see calculations.
The company has experienced a consistent decline in its net fixed asset turnover ratio over the five-year period from 2019 to 2023. This trend indicates a reduction in the efficiency with which the organization utilizes its long-term physical assets to generate revenue. While net sales have shown volatility, the asset base has expanded aggressively, leading to a compression of the turnover ratio.
- Revenue Performance
- Net sales exhibited a fluctuating pattern, starting at approximately $3.06 billion in 2019, declining to $2.71 billion in 2020, and recovering to $3.32 billion by the end of 2023. Despite the growth in 2023, the revenue increases have not kept pace with the growth of the fixed asset base.
- Fixed Asset Expansion
- There is a clear and continuous upward trend in property, plant, and equipment, including right-of-use assets. The asset base grew from $2.33 billion in 2019 to $4.50 billion in 2023, representing a nearly 93% increase over the period. This suggests significant capital expenditure and investment in production capacity.
- Net Fixed Asset Turnover Analysis
- The turnover ratio decreased steadily from 1.32 in 2019 to 0.74 in 2023. A critical inflection point occurred between 2021 and 2022, where the ratio dropped from 1.02 to 0.72. This sharp decline corresponds with a period where net sales decreased while the asset base continued to grow by approximately $773 million. Although the ratio stabilized slightly at 0.74 in 2023, it remains significantly lower than 2019 levels, reflecting a lower rate of revenue generation per dollar of fixed assets.
In summary, the divergence between the rapid growth in long-term investments and the more moderate, inconsistent growth in net sales has resulted in a deterioration of asset productivity. The organization is currently operating with a much larger asset base that has yet to translate into a proportional increase in top-line revenue.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Total Asset Turnover
First Solar Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net sales | 3,318,602) | 2,619,319) | 2,923,377) | 2,711,332) | 3,063,117) | |
| Total assets | 10,365,132) | 8,251,228) | 7,413,746) | 7,108,931) | 7,515,689) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.32 | 0.32 | 0.39 | 0.38 | 0.41 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.33 | 0.35 | 1.32 | — | — | |
| Analog Devices Inc. | 0.25 | 0.24 | 0.14 | 0.26 | — | |
| Applied Materials Inc. | 0.86 | 0.96 | 0.89 | 0.77 | — | |
| Broadcom Inc. | 0.49 | 0.45 | 0.36 | 0.31 | — | |
| Intel Corp. | 0.28 | 0.35 | 0.47 | — | — | |
| KLA Corp. | 0.75 | 0.73 | 0.67 | — | — | |
| Lam Research Corp. | 0.93 | 1.00 | 0.92 | — | — | |
| Marvell Technology Inc. | 0.26 | 0.20 | 0.28 | — | — | |
| Micron Technology Inc. | 0.24 | 0.46 | 0.47 | — | — | |
| NVIDIA Corp. | 0.65 | 0.61 | 0.58 | — | — | |
| Qualcomm Inc. | 0.70 | 0.90 | 0.81 | 0.66 | — | |
| Texas Instruments Inc. | 0.54 | 0.74 | 0.74 | — | — | |
| Total Asset Turnover, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.43 | 0.49 | 0.52 | — | — | |
| Total Asset Turnover, Industry | ||||||
| Information Technology | 0.61 | 0.64 | 0.62 | — | — | |
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
Total asset turnover = Net sales ÷ Total assets
= 3,318,602 ÷ 10,365,132 = 0.32
2 Click competitor name to see calculations.
The analysis of asset utilization between 2019 and 2023 indicates a general decline in the efficiency with which assets are employed to generate revenue. Although net sales reached a five-year peak in the final period, the growth in the total asset base has outpaced revenue gains, resulting in a downward trend in the total asset turnover ratio.
- Net Sales Trends
- Revenue exhibited volatility over the observed period, declining from 3.06 billion USD in 2019 to a low of 2.62 billion USD in 2022. However, a significant recovery occurred in 2023, with net sales rising to 3.32 billion USD, representing the highest value within the analyzed timeframe.
- Total Asset Expansion
- The asset base remained relatively stable between 2019 and 2021, hovering between 7.1 and 7.5 billion USD. Starting in 2022, a period of aggressive growth began, with total assets increasing to 8.25 billion USD and further accelerating to 10.37 billion USD by the end of 2023.
- Total Asset Turnover Performance
- The total asset turnover ratio decreased from 0.41 in 2019 to 0.32 in 2023. The most pronounced decline occurred between 2021 and 2022, when the ratio dropped from 0.39 to 0.32. The stagnation of this ratio at 0.32 through 2023 suggests that the recent substantial investments in assets have not yet yielded a proportional increase in sales volume.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Equity Turnover
First Solar Inc., equity turnover 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 sales | 3,318,602) | 2,619,319) | 2,923,377) | 2,711,332) | 3,063,117) | |
| Stockholders’ equity | 6,687,469) | 5,836,055) | 5,959,551) | 5,520,928) | 5,096,767) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 0.50 | 0.45 | 0.49 | 0.49 | 0.60 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.41 | 0.43 | 2.19 | — | — | |
| Analog Devices Inc. | 0.35 | 0.33 | 0.19 | 0.47 | — | |
| Applied Materials Inc. | 1.62 | 2.11 | 1.88 | 1.63 | — | |
| Broadcom Inc. | 1.49 | 1.46 | 1.10 | 1.00 | — | |
| Intel Corp. | 0.51 | 0.62 | 0.83 | — | — | |
| KLA Corp. | 3.59 | 6.57 | 2.05 | — | — | |
| Lam Research Corp. | 2.12 | 2.74 | 2.43 | — | — | |
| Marvell Technology Inc. | 0.38 | 0.28 | 0.35 | — | — | |
| Micron Technology Inc. | 0.35 | 0.62 | 0.63 | — | — | |
| NVIDIA Corp. | 1.22 | 1.01 | 0.99 | — | — | |
| Qualcomm Inc. | 1.66 | 2.45 | 3.37 | 3.87 | — | |
| Texas Instruments Inc. | 1.04 | 1.37 | 1.38 | — | — | |
| Equity Turnover, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.76 | 0.86 | 0.98 | — | — | |
| Equity Turnover, Industry | ||||||
| Information Technology | 1.54 | 1.71 | 1.77 | — | — | |
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
Equity turnover = Net sales ÷ Stockholders’ equity
= 3,318,602 ÷ 6,687,469 = 0.50
2 Click competitor name to see calculations.
The analysis of equity turnover from 2019 to 2023 reveals a period of fluctuating asset utilization and a general expansion of the equity base. The efficiency with which shareholders' equity is used to generate net sales experienced a downward trend for the majority of the period, reaching a trough in 2022 before showing signs of recovery in 2023.
- Equity Turnover Trends
- The equity turnover ratio decreased from 0.60 in 2019 to 0.45 by 2022. This trajectory indicates that the capacity to generate revenue relative to the equity investment diminished over these four years. A modest recovery to 0.50 was recorded in 2023, suggesting a renewed alignment between capital investment and sales output.
- Net Sales Performance
- Revenue exhibited volatility over the five-year span. Following declines in 2020 and 2022, net sales reached a period peak of US$ 3,318,602 thousand in 2023. This significant growth in the final year served as the primary driver for the reversal of the declining turnover ratio.
- Stockholders' Equity Expansion
- The equity base grew steadily, increasing from US$ 5,096,767 thousand in 2019 to US$ 6,687,469 thousand in 2023. Because equity grew at a more consistent pace than net sales—which experienced intermittent contractions—the turnover ratio was pressured downward throughout the period until the sales surge in 2023.
- Operational Efficiency Insight
- The equity turnover ratio remained consistently below 1.0 throughout the analyzed period, which is characteristic of capital-intensive operations where substantial equity is required to support revenue generation. The improvement from 0.45 in 2022 to 0.50 in 2023 reflects an increase in capital productivity, although efficiency levels have not yet returned to 2019 benchmarks.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?