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    First Solar is projected to see decreases in 2012 in cost of sales, production start-up costs, and property, plant and equipment costs as manufacturing costs are reduced and additional production lines are completed. This will improve First Solar's financial position as accumulated earnings and proceeds from marketable securities increase. While 2011 was challenging due to high production costs, First Solar's future looks bright as the U.S. solar market emerges and its manufacturing costs decrease. It is projected to be worth $3.13 billion, higher than its current market value.

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    First Solar is projected to see decreases in 2012 in cost of sales, production start-up costs, and property, plant and equipment costs as manufacturing costs are reduced and additional production lines are completed. This will improve First Solar's financial position as accumulated earnings and proceeds from marketable securities increase. While 2011 was challenging due to high production costs, First Solar's future looks bright as the U.S. solar market emerges and its manufacturing costs decrease. It is projected to be worth $3.13 billion, higher than its current market value.

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    11 views2 pages

    Accounting Paper

    Uploaded by

    Heather
    First Solar is projected to see decreases in 2012 in cost of sales, production start-up costs, and property, plant and equipment costs as manufacturing costs are reduced and additional production lines are completed. This will improve First Solar's financial position as accumulated earnings and proceeds from marketable securities increase. While 2011 was challenging due to high production costs, First Solar's future looks bright as the U.S. solar market emerges and its manufacturing costs decrease. It is projected to be worth $3.13 billion, higher than its current market value.

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    of 2

    20112012 ro[ecLlons

    neL Sales CosL of Sales reducLlon ln cosL 2012 roducLlon SLarLup reduced ln 2012 as mosL llnes
    become acLlve end of 2011 beglnnlng of 2012 8esearch and uevelopmenL sLeadlly lncreaslng as
    pressure Lo be mosL efflclenL and reduce producLlon cosLs
    roperLy planL and equlpmenL (up blg ln 2011 beglns Lo level off ln 2012) 1hls ls due Lo flnlshed
    consLrucLlon and some fuLure plans belng puL on hold Long Lerm debL (blg lncrease 2011) accumulaLed
    earnlngs (lncreaslng lncremenLally 2011 more ln 2012) proceeds from markeLable securlLles (2012)











    SLock 8ecommendaLlon
    2011 very Lough year as producLlon cosLs could noL drop qulck enough Lo maLch sales prlce 8educLlon
    ln commodlLles ln Luropean markeLs as well as reduced producLlon cosLs of Chlnese compeLlLors'
    drasLlcally reduced sales prlce of panels as supply ls far ouLwelghlng demand As manufacLurlng cosL of
    panels are reduced and consLrucLlon ls compleLed on addlLlonal manufacLurlng llnes llrsL Solar wlll see
    a decrease ln cosL of goods sold producLlon sLarLup and properLy planL equlpmenL Comblne Lhese
    decreases and an emerglng uS solar markeL and llrsL Solar's fuLure ls looklng brlghL
    uslng Lhe dlscounLed cash flow meLhod llrsL Solar ls pro[ecLed Lo be worLh 313 bllllon whlch ls 1 bllllon
    hlgher Lhan Lhelr currenL markeL value of equlLy 1he solar markeL ls noL one LhaL wlll experlence a qulck
    Lurnaround lnvesLors looklng aL Lhls markeL should be prepared Lo be lnvesLed for several years 2011
    has proven Lo be a LesL for solar companles wlLh lLs dramaLlcally decreased panel prlces and lncreaslng
    number of companles noL survlvlng Lhe markeL year lor Lhe companles LhaL have survlved Lhe currenL
    evoluLlon of Lhe solar markeL Lhere are beLLer days ahead 1he unlLed SLaLes ls emerglng as large
    poLenLlal markeL as prlces drop and rebaLes are becomlng lncreaslngly popular 1here are several
    forelgn markeLs LhaL are showlng lncreaslng promlse as well speclflcally lndla and AusLralla lor Lhe
    shorL Lerm Lhough Cermany and Lhe Lu are sLlll Lhe largesL consumers of solar panels
    llrsL solar holds Lhe advanLage of belng Lhe largesL Amerlcan manufacLurer and also employs a Lwo
    segmenL mode of operaLlon 1hey noL only manufacLure Lhe panels buL also offer Lhe servlce of belng
    Lhe pro[ecL planner for large elecLrlcal companles LhaL are looklng Lo add solar elecLrlclLy Lo Lhelr
    reperLolre 1hls wlll prove Lo be very lmporLanL as more and more of Lhe world's energy needs Lo be
    produced from renewable energy sources Cermany has Lhe mandaLe of closlng all of lLs nuclear power
    planLs by 2022 and Lhe Luropean unlon ls promlslng Lo produce 20 of lLs power from solar sources by
    2020

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