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Failure of Canadian Solar - Essay Example
Finance & Accounting
Pages 14 (3514 words)
The report analyses a situation where North Mountain Engagements LLP evaluates one of the firms in the international solar PV industry for investment purposes. Recommendations have been given in the report so that Canadian Solar could improve its position in the market and improve its profitability…
This research aims to evaluate and present North Mountain Engagements LLP, a Hedge fund company which invests in different companies to increase their capital however the company invests in only those companies of which it could improve the earnings significantly and increase the value of the firm by twice. This is the reason the company invests and analyses the company thoroughly before it makes any investment decision. The report analyses one of the companies in the Solar PV industry, Canadian Solar which has been suffering from losses from 2006 and this report investigates whether the company would be able to improve its earnings by changing their strategies. North Mountain Engagements has a higher debt to equity ratio which is defined as total debt of the company in comparison to total equity and higher debt to equity ratio reflects higher risk. Thus, with higher risks shareholders demand higher return so; this is the reason why the North Mountain Engagements LLP requires higher profits. Canadian Solar has been known over the years as CSI meaning Canadian Solar International is suffering from losses despite of the overall demand in the industry has been growing and growing revenues of the company. Canadian Solar has reported total growth of 135.7% in five years from 2004 to 2008 with revenues of the company growing from $9.7 million to $705 million. With several opportunities in the industry, North Mountain Engagements feels that the Canadian Solar can live up to the potential and become an important firm to invest. ...
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