First Solar Inc. (NASDAQ:FSLR)

Net Fixed Asset Turnover

The net fixed asset turnover ratio shows a declining trend over the analyzed periods. Starting from a high of 1.47 in September 2020, the ratio progressively decreased to around 0.72 by September 2024. There are minor fluctuations within this downward trend, with slight improvements noted toward late 2023, but overall, the ratio indicates a diminishing efficiency in utilizing fixed assets to generate revenue.

Total Asset Turnover

Total asset turnover also reflects a generally downward pattern from 0.50 in September 2020 to approximately 0.34 in the later periods around 2023 and 2024. The ratio experienced some stability starting mid-2022, maintaining a range close to 0.32–0.34. This suggests a reduction in the efficiency of the company's total assets in generating sales, but with signs of stabilization in recent quarters.

Equity Turnover

Equity turnover demonstrates a decline initially from 0.65 in September 2020 to a low of around 0.42 in early 2022. Following this, the ratio shows a gradual recovery and stabilizes near 0.50–0.52 through 2023 and into 2024. This indicates that while the efficiency with which equity is used to generate revenue weakened in the earlier periods, it improved and became consistent in more recent quarters.

The analysis of the quarterly financial data reveals distinct trends in net sales, property, plant and equipment (PP&E), and net fixed asset turnover over the specified periods.

Net Sales

Net sales exhibit a fluctuating but generally increasing pattern over time. Initial quarters of 2020 show moderate sales ranging from approximately US$532 million to US$927 million. The trend includes cyclical declines and recoveries, with notable increases in later periods, culminating in a peak exceeding US$1.15 billion by the last quarter reported. This suggests periods of growth interspersed with temporary sales contractions.

Property, Plant and Equipment, Net

The net value of property, plant and equipment shows a consistent upward trajectory throughout the entire period. Starting near US$2.24 billion, the asset base grows steadily each quarter, reaching over US$5.32 billion by the end of the data set. This continuous increase indicates ongoing capital investment and expansion in fixed assets, likely supporting future production capacity and operational capabilities.

Net Fixed Asset Turnover

The net fixed asset turnover ratio demonstrates a declining trend overall. Beginning with values above 1.3 in early 2020, indicating a relatively efficient use of fixed assets to generate sales, the ratio steadily decreases to values around 0.7 by the latest quarters. This decline implies that despite increased investment in fixed assets, their utilization in producing sales has diminished, suggesting either underutilization of new assets or a lag in realizing sales growth from recent capital expenditures.

In summary, the data reveals strong capital investment in fixed assets alongside increasing but variable net sales, resulting in a declining efficiency of fixed asset utilization. This pattern may reflect an expansion phase where new assets have yet to fully translate into proportionate sales growth.

The analysis of quarterly financial data reveals several notable trends in the company's performance metrics over the observed periods.

Net Sales

Net sales exhibited significant variability across the quarters. Initially, there was an upward trend from March 2020 through September 2020, increasing from approximately 532 million to over 927 million USD. This was followed by a decline in the fourth quarter of 2020. Throughout 2021, net sales fluctuated without a clear upward or downward trend, with values ranging mostly between 580 million and 900 million USD. In 2022, sales showed considerable volatility but peaked notably in the last quarter, exceeding one billion USD. The upward momentum continued into 2023 and early 2024, with the highest sales recorded in December 2023 at nearly 1.16 billion USD, maintaining elevated levels into 2024, albeit with some quarter-to-quarter variation.

Total Assets

Total assets demonstrated a consistent increase over the entire period under review. Starting at approximately 6.95 billion USD in March 2020, asset levels gradually rose each quarter, reaching over 11.4 billion USD by September 2024. This steady growth indicates ongoing investments or asset accumulation, contributing to the company’s expanding asset base without notable regression in any quarter.

Total Asset Turnover

The total asset turnover ratio, indicating the efficiency with which assets generate sales, showed a general declining trend from 0.44 in the early quarters of 2020 to a low of around 0.32 by the end of 2022. From 2023 onward, the ratio stabilized, fluctuating narrowly between 0.32 and 0.34. This trend suggests that while the company increased its asset base substantially, the rate of sales growth relative to assets slowed, implying a decrease in asset utilization efficiency over time.

Overall, the company has shown strong growth in net sales and total assets, indicating business expansion and asset investment. However, the declining total asset turnover ratio signals that sales growth has not kept pace proportionally with asset growth, suggesting potential challenges in converting asset investments into equivalent sales increases efficiently. Continued monitoring of this ratio along with operational strategies may be warranted to enhance asset utilization going forward.

The analysis of the quarterly financial data reveals several notable trends and patterns over the observed periods.

Net Sales

Net sales show a fluctuating yet overall increasing trend over the quarters. In early 2020, sales started at approximately $532 million and then experienced a general upward movement with some volatility. Peak sales are observed notably in the fourth quarters of several years, reaching over $1.1 billion by December 2023. The data indicate seasonal spikes around year-end periods. Despite interim decreases in some quarters, the overall trajectory points to growth in net sales, achieving the highest figures towards the end of the data range in 2024.

Stockholders’ Equity

Stockholders' equity illustrates a consistent upward trend throughout the reported quarters. Beginning at roughly $5.17 billion in the first quarter of 2020, it exhibits steady increases with minor fluctuations, culminating near $7.59 billion by the third quarter of 2024. The growth indicates successful retention of earnings or capital inflows, strengthening the company's financial base over time. This steady rise in equity suggests an enhancement in the company's net worth and financial stability.

Equity Turnover Ratio

The equity turnover ratio, which reflects how effectively the company utilizes its equity to generate sales, remains relatively stable but shows a slight decline over the initial periods, decreasing from approximately 0.59 in early 2020 to around 0.42 in 2021 and 2022. However, after this dip, it demonstrates a gradual recovery, increasing to approximately 0.52 by mid-2024. This pattern suggests a period of reduced efficiency in equity utilization following the onset of 2021, with subsequent improvement in the latest quarters. The ratio's moderate level throughout indicates the company balances between equity growth and sales generation without extreme volatility.

In summary, the financial data indicate robust growth in net sales and stockholders' equity over the years, alongside a fluctuating but recovering equity turnover ratio. The increases in sales and equity suggest strengthening market performance and capital base, while the equity turnover dynamics point to phases of adjustment in asset utilization efficiency.