Financial Statement Analysis 2015 V2

8/18/2019 Financial Statement Analysis 2015 V2

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Financial Statement Analysis 2015-2016

Assignment

First Solar Inc.


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'i$%t Sola$( )n*. i% a N+S,+- li%ted +/e$i*an hotovoltai* 1 V /anu a*tu$e$ o $igid thin il/ /odule%( whi*h al%o $ovide% utility %*ale V owe$ lant% and o e$% %e$vi*e% in*luding inan*e( *on%t$u*tion( and /aintenan*e and end

o li e anel $e*y*ling. + S5 7 analy%i% and a o$te$ % o$*e% analy%i% o the *o/ any i% $ovided in ,ata : 2 inthe + endi;2. Reformulation'i$%t( o e$ating and inan*ial a*tivitie% a$e %e a$ated. )n the #alan*e %heet V wa% negative. )n 20 and 20 2( we identi ied that the /ain d$ive$ o the R i% RN + and it% value% we$e negative( #ut due to the #ene i*ial e e*t $o/ the inan*ial leve$age( the e e*t

$o/ the RN + wa% %o tened and R wa% %lightly in*$ea%ed. )n 20 3 and 20 4( we witne%% the o o%ite %ituation(


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$e%t$u*tu$ing and a%%et i/ ai$/ent% e; en%e% a% well a% in ta; $ate%. 7hey $e%ulted into net )othe$ whi*h va$ied in ala$ge $ange. 7he in*$ea%e in +7 in 20 20 4 wa% d$iven #y the in*$ea%e in %ale% and the de*$ea%e in N +. 7hi%

de*$ea%e in N + wa% in tu$n d$iven #y a de*$ea%e in o e$ating a%%et% 1/ainly in >( a**ount% $e*eiva#le% t$ade andgoodwill and in*$ea%e in o e$ating lia#ilitie% 1/ainly in a**ount% aya#le( a**$ued e; en%e% and ay/ent% and

#illing% o$ de e$$ed $o?e*t *o%t% . 'i$%t Sola$ gene$ated o%itive g$owth in $e*ent yea$%( a% *an #e o#%e$ved $o/ in*$ea%ing t$end in R). 7hi% t$end wa% dete$/ined #y an in*$ea%e in R ( howeve$ it wa% *on%tantly lowe$ than the*o%t o e=uity *a ital( $e%ulting in a negative value% o$ the R). 7he latte$ i/ lie% that the de*$ea%e in ove$ the

e$iod 20 20 3 would #e #ene i*ial #e*au%e it would %o ten the negative e e*t $o/ the di e$en*e #etween R and $. +% /entioned #e o$e( the in*$ea%e in R wa% d$iven /ainly #y an in*$ea%e in RN + in 20 20 4. )n tu$n(the in*$ea%e in wa% d$iven #y the a*t the de*line in N + and the in*$ea%e in N'+.4. Future performance5e have a%%u/ed that 'i$%t Sola$ will go th$ough two %tage% o g$owth F $o/ 20 to 20 9 1 ive yea$ e$iod the*o/ any ha% a no$/al g$owth and $o/ 20 9 onwa$d% the *o/ any a*hieve% *on%tant g$owth. ,u$ing the e$iod o no$/al g$owth we o$e*a%t a %ale% g$owth $ate o 4E. 5e have u%ed the hi%to$i*al g$owth $ate o R 1ave$age yea$on yea$ g$owth ove$ the yea$ e$iod #etween 20 0 and 20 4 to o$e*a%t the %ale% g$owth $ate. 5e have then

o$e*a%ted the individual line ite/% o the *o/ any % $e o$/ulated in*o/e %tate/ent and #alan*e %heet to $ovide anove$view o how *hange% in value% o ea*h individual line ite/ a e*t%


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!PPE"#$%

!&&reviations'. R F Retu$n n =uity

2. RN + F Retu$n on Net e$ating +%%et%3. N + F Net e$ating +%%et%4. NK F Net Ko$$owing


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o$tunitie%

. ee ing in /ind the g$owing de/and o $odu*t% $elated to $enewa#le ene$gy( in a$ti*ula$( %ola$ ene$gy( 'i$%tSola$ ha% an e%ta#li%hed /a$ket de/and o$ it% $odu*t%

2. il $i*e% 1though low at the *u$$ent /o/ent have #een at ve$y high level% 1on an ave$age I80 e$ #a$$elwhi*h i% leading a highe$ de/and in $enewa#le%. 7hi% will uel %ale% g$owth o$ the *o/ any.

7h$eat%

. 7hi$d gene$ation %ola$ anel% a$e going to #e a $eality in the nea$ utu$e and will #e $odu*ed and a liede i*iently enough /aking %e*ond gene$ation thin il/ *ell%( %u*h a% tho%e $odu*ed #y 'i$%t Sola$( o#%olete.

2. K$eakth$ough% in othe$ o$/% o $enewa#le ene$gy 1%u*h a% geothe$/al( hyd$oele*t$i*( wind( tidal wave et*./ay a e*t the %ale% o 'i$%t Sola$ a% the%e a$e *o/ li/enta$y to 'i$%t Sola$ % $odu*t%

3.

#ata 2' Porter-s 5 forces anal,sis


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2009 . 'i$%t Sola$ ha% %igni i*ant /a$keting( di%t$i#ution and /anu a*tu$ing o e$ation% #oth within and out%ide theGnited State%. 'i$%t Sola$ % %u#%tantial inte$national *u%to/e$ #a%e %u#?e*t% the *o/ any to a nu/#e$ o $i%k%

in*luding un avo$a#le oliti*al( $egulato$y( and ta; *ondition% in the o$eign *ount$ie% o thei$ *u%to/e$ #a%e. + /a?o$ $i%k the i$/ a*e% i% that it *u$$ently de end% on a li/ited nu/#e$ o *u%to/e$%( with th$ee *u%to/e$% a**ounting o$ the /a?o$ity o the /odule net %ale%. >ven though 'i$%t Sola$ % long te$/ %u ly *ont$a*t% /aintain owe$ on the %ideo the *o/ any $athe$ than o$ #uye$%( on*e *u$$ent *ont$a*t% $un out( #uye$ owe$ will /o%t likely #e %igni i*antlyhighe$( a% the $enewa#le ene$gy /a$ket will have u$the$ develo ed( and thi% *ould adve$%ely i/ a*t $o it and %ale%

o$ the #u%ine%% when $enewing o$ e%ta#li%hing new *u%to/e$ *ont$a*t%.

Ka$$ie$% to New >nt$y

7he$e a$e %eve$al #a$$ie$% to ent$y in the %ola$ owe$ indu%t$y. ne o the /ain #a$$ie$% to ent$y i% the va%t a/ount o $e%ea$*h and develo /ent $e=ui$ed to #e a#le to /anu a*tu$e a *o/ etitive te*hnology at a *o/ etitive $i*e 1Kalayanet +l.( 2009 . ove$n/ent and *ultu$al inte$e%t in g$een te*hnology and $enewa#le ene$gy /ake the %ola$ %e*to$ att$a*tive to new i$/%P howeve$ a% /any gove$n/ent%( %u*h a% e$/any and '$an*e( #egin *utting #a*k att$a*tive%u#%idie% and in*entive%( the *o%t to ente$ the indu%t$y will $i%e( and /ay #e*o/e a le%% att$a*tive ventu$e o$ new*o/ anie% 1Ha$lin( 20 .4.

7h$eat o Su#%titution

'i$%t Sola$ a*e% inten%e *o/ etition $o/ /anu a*tu$e$% o *$y%talline %ili*on %ola$ /odule%( thin il/ %ola$ /odule%(and %ola$ the$/al and *on*ent$ated V %y%te/%. 7he thin il/ %ola$ anel indu%t$y ha% %eve$al %u#%titute% in*luding%ili*one #a%ed hotovoltai* *ell% and othe$ ty e% o hotovoltai* *ell%( and othe$ ty e% o $enewa#le ene$gy 1Sou$*e'i$%t Sola$( 0 k . 7he *o/ any *ould #e a e*ted #y the in*$ea%ing o ula$ity o othe$ $enewa#le gene$ationte*hnologie%. 7he /a$ket o$ uel *ell% i% $a idly evolving and new te*hnologie% a$e #eing develo ed u%ing uel *ell%to $odu*e lowe$ *a$#on e/i%%ion% and gene$ate high level% o ele*t$i*ity 1+nde$%on et al . 7he hyd$ogen uel *ell

#a%ed on natu$al ga% i% #e*o/ing e*ono/i*ally att$a*tive in %/all %*ale owe$ gene$ation a li*ation% andt$an% o$tation %e*to$% 1+nde$%on et al . )t i% $o?e*ted that the /a$ket o$ the%e uel *ell% would e/e$ge a% a new%ou$*e o di%t$i#uted owe$ a te$ 2020 1+nde$%on et al . 7hi% kind o te*hnology( whi*h ty i*ally ha% a lowe$ u $ont*o%t( i% *u$$ently gaining $e e$en*e( /ay lowe$ the de/and o$ the *o/ any % $odu*t% and %e$vi*e%. Ke%ide%(

$ $ $


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+a&le 1

REF*R U/!+E# (+!+E E"+( *F *PER!+$*"( (In thousands US dollars)

2 !" 2 !3 2 !2 2 !! 2 !

Net %ale% 3(39 (8 4 3(308(989 3(368( 4 2(!66(20! 2( 63(


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+a&le 2

REF*R U/!+E# B!/!"CE (0EE+( $n t ousan s U( ollars e cept s are ata

2 !" 2 !3 2 !2 2 !! 2 !*peratin7 !ssets +**ount% $e*eiva#le t$ade( net 3 (434 36(383 3( 6! 3 0( 68 30 ( 3!+**ount% $e*eiva#le( un#illed and $etainage !6(9! 2 (323 400(98! 33(399 (482)nvento$ie% 0 (088 388(9 434(92 4! (86! 9 (863Kalan*e o %y%te/% a$t% 2 (083 33(!3 98(903 3(!84 4( !9,e e$$ed $o?e*t *o%t% 29(3 4 6(9 ! 2 (390 9!(!02 4(446

,e e$$ed ta; a%%et%( net 9 ( 6 63(899 44(0!0 4 ( 44 388+%%et% held o$ %ale 20(!28 32(626 49( 2

$o e$ty( lant and e=ui /ent( net (402(304 (38 (084 ( 2 (382 (8 (9 8 (430(!89V %ola$ owe$ %y%te/%( net 46(393$o?e*t a%%et% and de e$$ed $o?e*t *o%t% 8 0(348 !20(9 6 84 (4!8 49! 69 320( 40

,e e$$ed ta; a%%et%( net 222(326 296(603 3 !(4!3 340(2!4 2 9(236)nve%t/ent% in un*on%olidated a iliate% and ?oint ventu$e% 2 (029 !(32

oodwill 84(98 84(98 6 (444 6 (444 433(288the$ intangi#le%( net 9(236 !(4 6

)nvento$ie% (6 ! 29(664 34(3! 60(! 42(!28Retainage 992 2!0(364

$e aid e; en%e% and othe$ *u$$ent a%%et% 8( !9 86(!24 200( 38 26 (3 9 0!(60the$ a%%et% 49(4 9 48(66 4!( 92 6!(6 43(488

+otal *! 4(208(099 4(822(236 (009(20 4(!2 (434 3( 9( 6 *peratin7 /ia&ilities +**ount% aya#le I2 4(6 6 I26 (333 I3 0(230 !6(448 82(3 2

)n*o/e ta;e% aya#le (!2! 6(!0! (4!4 9( 4 6(83+**$ued e; en%e% 388( 6 320(0!! 4(433 406(6 9 244(2!Killing% in e;*e%% o *o%t% and e%ti/ated ea$ning% 9 (346 !(!66 2(422 32(204

ay/ent% and #illing% o$ de e$$ed $o?e*t *o%t% 60( 9 642(2 4 !3 (0 3 3 9(8 4


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+a&le 3

REF*R U/!+E# (+!+E E"+( *F C!(0 F/*)( (In thousands US dollars)

2 !" 2 !3 2 !2 2 !! 2 !

Cas flo:s from operatin7 activities'

< >1;

Cas flo:s use in investin7 activities'

u$*ha%e% o $o e$ty( lant and e=ui /ent 2 !( 49 282( !6 3!9(228 !3 (8 4 88(9 4

$o*eed% $o/ %ale o $o e$ty( lant and e=ui /ent ( 32 6(403 (083)nve%t/ent in note% $e*eiva#le( a iliate !2(692 2 (6 9+*=ui%ition%( net o *a%h a*=ui$ed 4(306 30(!4 2(43! 2 ( 0 296(496

u$*ha%e o e=uity and *o%t /ethod inve%t/ent% 24(96! !(90 (000

Sale o inve%t/ent in $elated a$ty 28( 96the$ inve%ting a*tivitie% (8 ! 3( 33 992 (30

+otal cas flo:s use in investin7 activities $ 35> =3> 21= 356 42; =55 513

C @ $ 316 161 64< 2=< 3>5 =6

Cas flo:s pai to e&t ol ers'

) $ % $ * i d 2(966 6( 99 4(693 0( 6 20( 3


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Net in*$ea%e in *a%h and *a%h e=uivalent% 6(982 423(!!8 29 (6! 60(0!0 0 ( 90

> e*t o e;*hange $ate *hange% on *a%h and *a%h e=uivalent% 9(48! 3( 94 6(30! 2 (368 2(668

+otal cas flo:s pai to e&t ol ers F 34; 32; 1 16= ?=5 =5<

Cas flo:s pai to s are ol ers' $o*eed% $o/ %to*k o tion e;e$*i%e% (0 4 !6 8(326 9(3!9

>;*e%% ta; #ene it $o/ %ha$e #a%ed *o/ en%ation a$$ange/ent% 3 ( 66 3 (0!6 2!(3!3 0(836 69(36!

$o*eed% $o/ e=uity o e$ing( net o i%%uan*e *o%t% 428( 90 3!0( 08

+otal cas flo:s pai to s are ol ers ?31 166 ?464 32< ?2; 54> ?4=> 2;< ?;= ;46F8 316 161 64< 2=< 3>5 =6

#ifference &et:een C?$ an F8 < < < < <


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+a&le 4

REF*R U/!+E# (+!+E E"+( *F (+*CA0*/#ER(- E U$+ (In thousands US dollars)

! uste+otalE9uit,

Balance #ecem&er 26 2


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Net in*o/e $e o$ted 96(338

'o$eign *u$$en*y t$an%lation ad?u%t/ent% 9(896

Gn$eali&ed gain 1lo%% on /a$keta#le %e*u$itie% and $e%t$i*ted inve%t/ent% 26(8 3

Gn$eali&ed gain 1lo%% on de$ivative in%t$u/ent% 2 (493Lo%% on %ha$e #a%ed *o/ en%ation lan% !8(209

7a; #ene it 2!(3!3

Lo%% on %ha$e #a%ed *o/ en%ation lan% 1a te$ ta; 0(836

Compre ensive $ncome 3 (9 8 Balance #ecem&er 31 2


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Balance #ecem&er 31 2V Q N' J 4 .64E 33.9!E 6. E 9.33E NK< Q N'>JN'+ .20E 2.40E 0.90E !.!0E

S R>+, Q RN + NK< !.66E 3.! E .!4E !.69E


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LL>V Q LJN + 8!.3 E 9!.33E !2.06E 44.00E

LS R>+, Q R + # 4. 9E 3.22E .!2E 0.4 E

V LS R>+, 2.8 E .3 E 4.84E 9.99E RN + Q )JN + 2.8 E .3 E 4.84E 9.99E

# !.00E !.00E !.00E !.00E R + Q 1 ) # L J + 0. 2E 9.20E 0. 2E 4.80E

LL>V Q LJN + 8!.3 E 9!.33E !2.06E 44.00E LS R>+, Q R + # 3. 2E 2.20E 6.88E .80E

V LS R>+, 2.8 E .3 E 4.84E 9.99E

Le#el 2: 'peratin& -ro$it .ri#ers RN'A ('I $rom sales * 'ther 'I)0N'A

(-1 $rom sales * -1 $rom others),A '

C $o/ %ale% Q ) $o/ %ale%JSale% .63E 2.8 E 3 .0 E 0.24E

+7 .4 .33 . 9 .0) $o/ %ale%JN + Q C $o/ %ale% +7 6.3!E !.0!E 36.92E 0.34E

C $o/ othe$% Q the$ )JSale% 2. 0E 4.30E 3 .0!E 20. 3E +7 .4 .33 . 9 .0

the$ )JN + Q C $o/ othe$% +7 3. 2E .! E 4 .!6E 20.34E


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>=uity in ea$ning% o un*on%olidated a iliate%( net o ta; 0. E 0.00E 0.00E 0.00E

e$ating )n*o/e 1a te$ ta; >.13 =.55 ?4..=>

'inan*ial in*o/e 1e; en%e)nte$e%t in*o/e 0. 3E 0. E 0.38E 0.48E

)nte$e%t e; en%e( net 0.06E 0.06E 0.4 E 0.00E

the$ 1e; en%e in*o/e( net 0. E 0. 4E 0.03E 0.02E 7a; e e*t% 0.02E 0.02E 0.0 E 0. 3E

Gn$eali&ed gain 1lo%% on /a$keta#le %e*u$itie% : $e%t$i*tedinve%t/ent% 2.68E .20E 0.80E 0.!8E

Gn$eali&ed gain 1lo%% on de$ivative in%t$u/ent% 0. 3E 0.02E 0.64E 0.6!E Net inan*ial in*o/e 1net o ta;e% 3. 0E 0.93E 0. E .83E= 4>.6< 5=.6>V %ola$ owe$ %y%te/%( net .3!E

$o?e*t a%%et% and de e$$ed $o?e*t *o%t% 22.5; 23.6; 1>.>4 14.;=,e e$$ed ta; a%%et%( net !.6 E 9.28E 9.!6E 0.84E


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+**$ued %ola$ /odule *olle*tion and $e*y*ling lia#ility 2.62E 2.4 E .49E 2.!3E

the$ lia#ilitie% 6.9 E 6.62E .64E .43E

the$ *u$$ent lia#ilitie% 0. 6E 0. 3E !.40E .! E+otal 62.


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20 8> 20 !> 20 6> 20 > 20 4 20 3 20 2 20+**ount% $e*eiva#letu$nove$

. . . . . !.80 4. 0 3.! 4.8

)nvento$y tu$nove$

4. 4 4. 4 4. 4 4. 4 4. 4 4. 0 4. 0 4. 4.63

> tu$nove$

2. 2. 2. 2. 2. 2.43 2.2! 2.02 .!0Sale%J+ve$age $o?e*t


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+a&le ;

!ssumptions' 2

3(39 (8 4

3( 2!(48! 3(668( 86 3(8 (329

3(96!(943 4( 26(660

)QSale C 48 (04! 12!3(644 1 36(9!0

282(806 309(868 9(648 66(034 !2(6!6 !9( 83 86(!66

N'>QNK< 10( $eviou% N' 0( N' 132(683

1 0( 9

1 (0 2

30(864 1 0 (086

12 (36

12 (3!6

12 (6 2

12 (8 0

126(336


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Resi ual $ncomeo el

2


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+a&le =

Full Forecast income statement 2E 2


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+a&le >

Full forecast &alance s eet 2E 2


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43( 39.66 4 (86 .0 40(2 4.86 38(!06. 9 3!(2 !.88 44(4!4.00

+otal 345 >22.1> 3


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+a&le 1<

Compan, name Price EP( PHE ratio Price?to? Price?to? &oo rati< sales ratio

F(/R First (olar $nc. 6 .99 .63 .!2 .32 .96 !ctual

(P)R (un Po:erCorporation 30.0 0.36 84.22 2. ! .3

+(/ +rina (olar /imit... .02 0.!! 4.3 0.9! 0.44

C($ Cana ian (olar $nc. 28.96 3. ! 9. 4 2.23 0. 4

DE Deneral Electric ... 3 . 4 0.3 0 .06 2.44 2. 2"EE "e tEra Ener7, $nc 03.89 6.98 4.89 2.3 2.8

$n ustr, avera7e 4 . ! 2.8! 39.22 .9! . 4

"o of s aresoutstan in7

mnEP( BVP(

Ve from R$valuationapproac

Pre ictePricet rou7EP(

Pre ictePricet rou7BV

Pre ictePricet rou7 R$

!vera7epre icteprice

F(/R First (olar $nc. 00.92 3.9! 46.! 2( 86(328.!2 .! 92.0 8! 2 .8 >1.1>2>


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C art 1

I(ource' Financial +imes :e&site

! itional "otes• 5ith $ega$d to 'i$%t Sola$ % #u%ine%% envi$on/ent( 'i$%t Sola$ now *o/ ete% again%t *onventional owe$ gene$ato$% and ha% $edu*ed

it% o*u% on the $oo to /a$ket. +% thi% *o/ any %hi t% it% o*u% away $o/ /odule %ale% to utility %*ale $o?e*t%( it will need to #e*o/e $i*e *o/ etitive with non %ola$ owe$ %ou$*e%. Howeve$( 'i$%t Sola$ i% the i$%t %ola$ anel /anu a*tu$ing *o/ any to%u**e%% ully $edu*ed /anu a*tu$ing *o%t% and o ti/i&ed e i*ien*y( whi*h /ake% it /o$e *o/ etitive in it% indu%t$y.

Financial Statement Analysis 2015 V2

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Transcript of Financial Statement Analysis 2015 V2