First Solar Inc (FSLR)

First Solar Inc's liquidity ratios exhibit a consistent trend of strong liquidity position over the past five years. The current ratio has ranged from 3.55 to 4.39, indicating the company's ability to cover its short-term obligations with its current assets. The quick ratio, which excludes inventory from current assets, also demonstrates a strong trend with values ranging from 2.70 to 3.47, reflecting a healthy ability to meet immediate liabilities without relying on inventory sales.

The cash ratio, which measures the company's ability to cover its short-term liabilities with cash and cash equivalents, has shown stability between 1.80 and 2.85, further highlighting the company's strong cash position relative to its current liabilities.

Overall, the liquidity ratios indicate that First Solar Inc has maintained a robust liquidity position over the years, which suggests that the company has adequate resources to meet its short-term financial obligations and operational needs.

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See also:

First Solar Inc Liquidity Ratios

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Additional liquidity measure

The cash conversion cycle of First Solar Inc has shown fluctuation over the past five years. In 2023, the company's cash conversion cycle increased significantly to 263.25 days, indicating a longer period of time taken to convert its investments in inventory and accounts receivable into cash. This could potentially be a concerning trend as it may indicate inefficiencies in managing working capital.

In 2022, the cash conversion cycle was at its lowest point over the five-year period at 89.55 days, suggesting that the company was able to enhance its cash conversion efficiency and generate cash more rapidly from its operational activities.

The year 2021 saw an increase in the cash conversion cycle to 135.47 days, which was higher compared to 2020 but lower than the peak in 2023. This increase may have resulted from changes in the company's inventory management or collection processes.

In 2020, the cash conversion cycle was 108.69 days, reflecting a moderate level compared to the other years. It seems that the company was able to manage its working capital effectively during this period.

In 2019, the cash conversion cycle stood at 125.39 days, indicating a longer period compared to 2022 but lower than 2023. This suggests some challenges in converting investments in inventory and accounts receivable into cash efficiently.

Overall, the trend in First Solar Inc's cash conversion cycle indicates fluctuations, with some years showing improvements in cash conversion efficiency while others showing increases in the time taken to convert working capital into cash. Monitoring and managing the cash conversion cycle is crucial for the company to ensure optimal utilization of its resources and liquidity position.