9 December 2014


First Solar Canadian Solar Trina Solar

Top 10 Solar Module Manufacturers with the Least Debt

Author: Alexandra Mebane, Solarplaza




The debt/equity ratio is the measurement of a company's financial leverage that is then calculated by dividing its liabilities (we used the debt & capital lease obligations) by the stockholders' equity. The debt/equity ratio illustrates what proportion of equity and debt the company is using to finance its assets.


The debt/equity ratio is of great value to investors in any business, because the more outstanding debt a company has, the greater the amount of earnings it must use to make payments on interest. In summation, a debt/equity ratio higher than 1 means that company assets are mainly being financed with debt; whereas a ratio less than 1 means that equity is providing the majority of the financing.





To put things into perspective we’ve added Yingli Green Energy to the list, a company that has one of the industries highest debt/equity ratios. It goes to show that the debt/equity ratio doesn't necessarily correlate with the success or performance of a company. On the one hand it’s impressive to see that, with a relatively small amount of capital, they’ve managed to become the number 2 supplier of solar modules in 2014. On the other hand of course you could doubt their financial strength.


Another interesting conclusion that may be drawn from this overview, is that although the list is spearheaded by American companies (dominating the Top 5), most companies in the list are in fact Chinese. This might discredit the common notion that most 'giant' Chinese manufacturers are debt-ridden and financially unhealthy.


A last observation to add, is that if you compare this top 10 of debt/equity ratios to the (predicted) top 10 ranking of 2014 module shipments, most (7) of the names do match. Of course, the case of Yingli Green Energy remains a very extreme and interesting exception to the rule...



(Disclaimer: Data from end of third quarter- 30.09.2014)



#1 First Solar Inc. (FSLR)


Location : Tempe, AZ, USA
Debt/Equity Ratio : 0.0455
Debt & Capital Lease Obligations : 218.26M
Shareholders Equity : 4.793B
Production Capacity : 1.8GW
Predicted Shipment Rank 2014 (IHS) : #8





#2 Ascent Solar Technologies (ASTI)

Location : Thornton, CO, USA
Debt/Equity Ratio : 0.55
Debt & Capital Lease Obligations : 5.84M
Shareholders Equity : 11.21M
Production Capacity : 30MW





#3 JASolar Holdings (JASO)


Location : Shanghai, China
Debt/Equity Ratio : 0.7624
Debt & Capital Lease Obligations : 647.02M
Shareholders Equity : 848.72M
Production Capacity : ~2.8 GW (expected)
Predicted Shipment Rank 2014 (IHS) : #5





#4 SunPower (SPWR)


Location : San Jose, CA, USA
Debt/Equity Ratio : 0.7988
Debt & Capital Lease Obligations : 1224.16M
Shareholders Equity : 1.387B
Production Capacity : ~ 1.2GW (expected)
Predicted Shipment Rank 2014 (IHS) : #10





#5 Trina Solar (TSL)


Location : Changzhou, JNG, China
Debt/Equity Ratio : 1.139
Debt & Capital Lease Obligations : 1.06B
Shareholders Equity : 930.88M
Production Capacity : 2,800MW
Predicted Shipment Rank 2014 (IHS) : #1





#6 Shunfeng Photovoltaics (SHUNF)


Location : Changzhou, JNG, China
Debt/Equity Ratio : 1.201
Debt & Capital Lease Obligations : 958.99M
Shareholders Equity : 768.96M
Production Capacity : ~ 2.4GW (expected)





#7 Canadian Solar (CSIQ)


Location : Ontario, Canada
Debt/Equity Ratio : 1.562
Debt & Capital Lease Obligations: 718.05M
Shareholders Equity: 649.78M
Production Capacity
: 3.0GW
Predicted Shipment Rank 2014 (IHS) : #3





#8 Solar World AG (SRWRF)


Location : Bonn, Germany
Debt/Equity Ratio : 1.7
Debt & Capital Lease Obligations : 73.2M
Shareholders Equity : 334.75M
Production Capacity : 700MW





#9 Jinko Solar Holding (JKS)


Location : Shanghai, China
Debt/Equity Ratio : 2.235
Debt & Capital Lease Obligations : 620.95M
Shareholders Equity : 527.5M
Production Capacity : 2.8GW
Predicted Shipment Rank 2014 (IHS) : #4





#10 Hanwha Solar One Co. (HSOL)


Location : Nantong, JNG, China
Debt/Equity Ratio : 3.525
Debt & Capital Lease Obligations : 663.27M
Shareholders Equity : 258.56M
Production Capacity : 230 MW
Predicted Shipment Rank 2014 (IHS) : #9





Perspective: Yingli Green Energy Ltd. (YGE)


Location : Baoding, HEB, China
Debt/Equity Ratio : 47.69
Debt & Capital Lease Obligations : 2.372B
Shareholders Equity : 49.73M
Production Capacity : 2.45GW
Predicted Shipment Rank 2014 (IHS) : #2






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