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.
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- Income Statement
- Cash Flow Statement
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Total Asset Turnover since 2006
- Price to Earnings (P/E) since 2006
- Price to Sales (P/S) since 2006
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Long-term Activity Ratios (Summary)
First Solar Inc., long-term (investment) activity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
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).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio shows a clear downward trend from 1.4 in 2019 to 0.75 in 2023. This indicates a decreasing efficiency in generating sales from fixed assets over the period. The most significant decline occurred between 2021 and 2022, where the ratio dropped from 1.1 to 0.74, after which it remained relatively stable.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- This adjusted turnover ratio follows a similar declining pattern as the net fixed asset turnover, starting at 1.32 in 2019 and falling to 0.74 in 2023. The inclusion of operating lease assets does not substantially change the overall trend, confirming the reduced asset efficiency over time.
- Total Asset Turnover
- The total asset turnover ratio experienced a slight decline from 0.41 in 2019 to 0.32 in 2023, suggesting a moderate decrease in the company's ability to generate sales from total assets. The ratio remained stable between 2022 and 2023, indicating some stabilization in asset usage efficiency after the decline.
- Equity Turnover
- Equity turnover decreased from 0.6 in 2019 to 0.45 in 2022, reflecting a reduced efficiency in generating revenue from shareholders' equity. However, a slight recovery is observed in 2023, with the ratio increasing to 0.5, suggesting a modest improvement in leveraging equity for revenue generation in the most recent year.
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 | ||||||
| Property, plant and equipment, net, including finance lease assets | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Information Technology | ||||||
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
= ÷ =
2 Click competitor name to see calculations.
- Net Sales
- Net sales exhibit a fluctuating trend over the five-year period. Beginning at approximately 3.06 billion US dollars in 2019, sales declined to around 2.71 billion in 2020. This was followed by a modest recovery in 2021 to nearly 2.92 billion, then a further decrease in 2022 to approximately 2.62 billion. In 2023, net sales increased significantly, surpassing previous years with a value close to 3.32 billion US dollars.
- Property, Plant and Equipment, Net
- The net value of property, plant, and equipment, including finance lease assets, shows a consistent upward trajectory throughout the period. Starting from about 2.18 billion US dollars in 2019, the value steadily increased each year, reaching nearly 4.41 billion by the end of 2023. The most notable growth increments occurred between 2021 and 2022, and again from 2022 to 2023, indicating considerable investments in fixed assets.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio demonstrates a declining trend over the analyzed years, illustrating reduced efficiency in utilizing fixed assets to generate sales. The ratio began at 1.4 in 2019, indicating strong productivity, then fell to 1.13 in 2020 and 1.1 in 2021. A more pronounced decrease occurred in 2022, dropping to 0.74, and the ratio remained relatively flat at 0.75 in 2023. This decline suggests that despite increasing investments in property, plant, and equipment, sales growth did not proportionally keep pace with the expansion of fixed assets.
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 | ||||||
| Property, plant and equipment, net, including finance lease assets | ||||||
| Operating lease assets | ||||||
| Property, plant and equipment, net, including finance lease assets (including operating lease, right-of-use asset) | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Information Technology | ||||||
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)
= ÷ =
2 Click competitor name to see calculations.
- Net Sales
- The net sales demonstrate a fluctuating trend over the observed periods. After a peak of approximately 3,063 million US dollars at the end of 2019, sales decreased to around 2,711 million in 2020. Thereafter, a moderate recovery occurred in 2021 with sales rising to roughly 2,923 million but then declined again in 2022 to approximately 2,619 million. However, in 2023, net sales markedly increased to about 3,319 million, reaching the highest level in the period under review.
- Property, Plant and Equipment, Net
- The net value of property, plant, and equipment, inclusive of finance leases and right-of-use assets, shows consistent growth throughout the years. Starting from about 2,327 million US dollars in 2019, the asset base expanded steadily to reach approximately 4,499 million by the end of 2023. This represents a significant investment increase, nearly doubling over five years.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio, which indicates how effectively the company utilizes its fixed assets to generate sales, reveals a declining trend over the time frame. The ratio decreased from 1.32 in 2019 to 0.74 in 2023. The decline was steady, with notable drops between 2019 and 2020, and again between 2021 and 2022. Despite the recovery in net sales in 2023, the turnover ratio saw only a marginal improvement from the previous year. This suggests that the increase in fixed assets has outpaced sales growth, indicating lower efficiency in asset utilization.
- Overall Insights
- The analysis reveals that while asset investment has grown substantially, net sales have varied without a consistent upward trend except for the recent recovery in 2023. The decreasing fixed asset turnover suggests operational efficiency challenges relative to asset investments. This pattern may warrant further examination into asset use and sales generation efficiency to optimize capital deployment.
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 | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| Total Asset Turnover, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Total Asset Turnover, Industry | ||||||
| Information Technology | ||||||
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
= ÷ =
2 Click competitor name to see calculations.
The financial data over the five-year period reveals notable fluctuations in net sales, total assets, and total asset turnover ratio. These metrics provide insight into the company's revenue-generating efficiency, asset base growth, and operational performance.
- Net Sales
- There is a variable trend in net sales from 2019 to 2023. Starting at approximately 3.06 billion US dollars in 2019, net sales declined to around 2.71 billion in 2020. Sales then showed a recovery to about 2.92 billion in 2021, followed by a further dip to roughly 2.62 billion in 2022. However, in 2023, net sales increased significantly to approximately 3.32 billion. This pattern suggests volatility with a recent strong rebound in revenue generation.
- Total Assets
- The total asset base exhibits a steady upward trajectory over the five years. Beginning at about 7.52 billion US dollars in 2019, total assets slightly decreased to 7.11 billion in 2020, before growing consistently to 7.41 billion in 2021 and 8.25 billion in 2022. The most substantial increase occurred in 2023, with total assets reaching approximately 10.37 billion. This growth indicates substantial investment or asset accumulation, particularly in the most recent period.
- Total Asset Turnover Ratio
- The ratio of net sales to total assets, representing asset efficiency, shows a declining trend over the observed period. From 0.41 in 2019, the ratio decreased to 0.38 in 2020 and slightly improved to 0.39 in 2021 before dropping to 0.32 in 2022 and remaining at 0.32 in 2023. Despite the increase in net sales in 2023, the asset turnover did not improve accordingly, possibly reflecting that asset growth outpaced sales growth or that assets were not fully utilized to generate sales.
Overall, the financial data indicates a company experiencing fluctuating net sales with a recent upswing, a consistent increase in asset base size, and a decline in asset utilization efficiency over the five-year period. The pronounced asset growth in the latest year alongside stable but lower asset turnover suggests a cautious interpretation of efficiency improvements despite higher revenues.
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 | ||||||
| Stockholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| Equity Turnover, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Equity Turnover, Industry | ||||||
| Information Technology | ||||||
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
= ÷ =
2 Click competitor name to see calculations.
- Net Sales
- The net sales demonstrated a fluctuating trend over the five-year period. The value decreased from 3,063,117 thousand US dollars in 2019 to 2,711,332 thousand US dollars in 2020, indicating a contraction during that year. A partial recovery occurred in 2021, with net sales rising to 2,923,377 thousand US dollars. However, 2022 saw another decline to 2,619,319 thousand US dollars. In 2023, a notable increase was observed, reaching 3,318,602 thousand US dollars, the highest value in the analyzed period.
- Stockholders’ Equity
- The stockholders' equity exhibited consistent growth throughout the period, increasing from 5,096,767 thousand US dollars in 2019 to 6,687,469 thousand US dollars in 2023. The equity expanded steadily each year, with a slight deceleration in growth between 2021 and 2022 but recovering and accelerating in 2023. This upward trend suggests strengthening financial stability and enhanced capital base over time.
- Equity Turnover
- The equity turnover ratio showed a gradual decline from 0.6 in 2019 to 0.45 in 2022, reflecting a decreasing efficiency in generating sales from the equity base during this period. In 2023, the ratio improved slightly to 0.5, indicating a modest recovery in the utilization of equity to generate revenue but remaining below the initial 2019 level. The overall trend indicates potential challenges in enhancing the turnover of equity despite growth in equity value.