First Solar Inc (FSLR)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,017,920 | 2,549,460 | 2,193,420 | 2,030,660 | 2,513,900 |
| Inventory | US$ in thousands | 819,899 | 621,376 | 666,299 | 567,587 | 443,513 |
| Inventory turnover | 2.46 | 4.10 | 3.29 | 3.58 | 5.67 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $2,017,920K ÷ $819,899K
= 2.46
The inventory turnover ratio for First Solar Inc has exhibited some variability over the past five years. In 2023, the inventory turnover ratio decreased to 2.46 from 4.10 in 2022, indicating that the company's inventory were sold and replaced 2.46 times during the year. This decrease may suggest that the company's inventory management efficiency declined in 2023 compared to the previous year.
When compared to 2021 and 2020, the inventory turnover ratio in 2023 remained lower, signifying a potential slowdown in inventory turnover efficiency. However, it is still higher than the ratio recorded in 2019, suggesting that improvements have been made from a longer-term perspective.
Overall, a lower inventory turnover ratio may imply excess inventory levels or slower sales relative to the amount of inventory held. It may also indicate potential issues with demand forecasting or production efficiency that could impact the company's financial performance and overall operational effectiveness. Further analysis of the factors influencing inventory management is recommended to better understand the implications of the changing inventory turnover ratio for First Solar Inc.
Peer comparison
Dec 31, 2023