First Solar Inc (FSLR)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.04 | 0.02 | 0.03 | 0.03 | 0.06 |
| Debt-to-capital ratio | 0.06 | 0.03 | 0.04 | 0.04 | 0.08 |
| Debt-to-equity ratio | 0.07 | 0.03 | 0.04 | 0.04 | 0.09 |
| Financial leverage ratio | 1.55 | 1.41 | 1.24 | 1.29 | 1.47 |
First Solar Inc's solvency ratios provide insights into the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has been relatively low and stable over the past five years, indicating that a small portion of the company's assets is financed by debt. This suggests that First Solar has a strong asset base and a conservative approach to debt financing.
Similarly, the debt-to-capital and debt-to-equity ratios exhibit a consistent and low trend, reflecting a healthy balance between debt and equity in the company's capital structure. A low debt-to-capital ratio indicates that First Solar relies more on equity financing, which can reduce financial risk and enhance financial stability.
The financial leverage ratio, which measures the proportion of assets financed by debt compared to equity, has shown a slight fluctuation but remains within a reasonable range. A decreasing trend in this ratio indicates that the company is becoming less reliant on debt to finance its operations, which can be seen as a positive sign of financial health and stability.
Overall, based on the solvency ratios analyzed, First Solar Inc appears to have a strong financial position with a conservative debt structure, adequate equity financing, and a prudent approach to managing its long-term financial obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 69.75 | 1.70 | 44.65 | 13.11 | -3.45 |
The interest coverage ratio for First Solar Inc was not available for the years 2023 and 2019. However, we can see a positive trend from 2020 to 2022, with the ratio improving from 42.98 to 63.43. The increasing trend indicates that the company's ability to meet its interest obligations improved over this period, reflecting a stronger financial position. It is essential for investors and creditors to monitor this ratio to assess the company's ability to service its debt and manage financial risks effectively.