Tesla Financial Statements and Financial Ratios Analyzed

Tesla: Brief Summary

Tesla Inc. has its global headquarters in Palo Alto, CA.  The company competes in the auto manufacturing industry, specifically in the cyclical consumer sector.  At present, the company employs approximately 70,000 people.  Tesla’s main revenue generator is the design, development, and leasing of electric vehicles, as well as energy generation and storage devices.

From a financial perspective, the company has a market capitalization of $580 billion.  The company has a beta of 2.0.  This indicates to investors that the company stock is substantially riskier as compared to the overall market.  In the last several years, Tesla has yet to pay any dividends.  This means that the firm is continually finding ways to re-invest its profits.  As for the stock price range, in the last 52 weeks, the organization’s stock was between $187.43 to $900.40.

 

 

Section 1: Tesla Income Statement Analyzed

In this section, I walk through a broad definition of what an income statement is and why it is important.  From this, I then discuss and define income statement line items, such as revenues, gross profits, etc. in detail.  After each line item is defined and discussed, I finally offer a summary analysis of Tesla's important income statement line item trends from 2016 to 2020, in most cases.

Tesla Revenue Growth.

In the last five years, Tesla’s revenues have grown annually, on average, at a 49% rate.  For a multinational organization, this annual growth rate is astounding.  However, a concerning trend for the organization’s revenue growth rate is that it has been haphazard.  For example, between 2017 and 2018, the firm’s growth rate was 82.5%.  Also, between 2020 and 2021, the organization’s growth rate was 70.7%.  However, from 2018 to 2019, the firm’s growth rate was only 14.5%.  A better strategy would be for the organization to implement operational strategies to ensure consistent revenue growth year over year.

Analyst Grade: A

Tesla 2021 Summarized Income Statement
Column1	2021	2020	2019	2018	2017
Revenues	53,823	31,536	24,578	21,461	11,758
COGS	40,217	24,906	20,509	17,419	9,536
Gross Profit	13,606	6,630	4,069	4,042	2,222
SG&A	4,517	3,145	2,646	2,835	2,477
Depreciation	2,911	2,322	2,154	1,901	1,636
R & D	2,593	1,491	1,343	1,460	1,378
Other
Total Operating Expenses	7,083	4,636	4,138	4,430	3,855
EBIT	6,523	1,994	(69)	(388)	(1,632)
Other Income
Interest Expense	371	748	685	663	471
EBT	6,343	1,154	(665)	(1,005)	(2,209)
Taxes	699	292	110	58	32
Net Income	5,644	862	(775)	(1,063)	(2,241)

 

Section 2: Tesla Balance Sheet Analyzed

For Tesla's balance sheet, I again go through each important line item from the balance sheet.  In reviewing each line item, I will define their balance sheets line items, such as cash, property, plant and equipment, and liabilities.  Next, I then offer a summary analysis of their important balance sheet line items.

Tesla Cash.

Tesla’s cash position ended 2017 at $3.3 billion.  In the next two years, the organization’s cash balance would increase moderately, ending 2019 at $6.2 billion.  However, in the next year, the firm’s cash position would balloon to $19.3 billion.  This cash increase may be due to the onset of the COVID-19 pandemic and the organization’s wish to have a substantial cash buffer through the pandemic.  However, the organization’s cash balance remained elevated in 2021, ending the year at $17.5 billion. 

A better strategy would be for the firm to divest some of the cash into short-term investments or reinvest the funds into operational growth opportunities.  In my opinion, this shows the mismanagement of short-term assets.

Analyst Grade: C

Tesla 2021 Summary Balance Sheet
Column1	2021	2020	2019	2018	2017
Cash	17,576	19,384	6,268	3,686	3,367
Short Term Investment	131	-	-	-	-
Account Receivable	1,913	1,886	1,324	949	515
Inventory	5,757	4,101	3,552	3,113	2,263
Other
Current Assets	27,100	26,717	12,103	8,307	6,570
Net PPE	18,884	12,747	10,396	11,330	10,027
Goodwill	200	207	198	68	60
Other
Total Assets	62,131	52,148	34,309	29,740	28,655
Accounts Payable	10,025	6,051	3,771	3,405	2,390
Accrued Expense	5,719	3,855	2,905	2,094	1,731
Accrued Taxes
Notes Payable
LT Debt - Current	1,589	2,132	1,785	2,568	9,415
Other
Total Current Liabilities	19,705	14,248	10,667	9,993	7,674
LT Debt	5,245	9,556	11,634	9,404	9,415
Other
Total Liabilities	30,548	28,418	26,199	23,427	23,022
Common Stock	29,803	27,260	12,737	10,249	9,178
Treasury
Retained Earnings	331	(5,399)	(6,083)	(5,318)	(4,974)
Other
Total Equity	30,189	22,225	6,618	4,923	4,237
Total Equity & Liability	62,131	52,148	34,309	29,740	28,655

 

Section 3: Tesla Financial Ratios Analyzed

For this section, I have chosen several different financial ratios to review for Tesla.  In reviewing each of their financial ratios, I first start with defining the financial ratio.  Next, I supply the financial formula for calculating the specific ratio.  Finally, I offer a brief analysis of their important Financial ratios. 

Tesla Total Asset Turnover.

Tesla’s total asset turnover ending 2017 was .4.  In the next four years, the organization’s total asset turnover would increase to .87 in 2021.  This shows that the firm is generating more revenues using assets under management on a continuous basis.  Operationally speaking, this is a good trend.

Analyst Grade: A

Tesla Return on Assets.

Tesla’s return on assets ended 2020 at 1.65%.  In the next year, the organization’s return on assets would jump up to 9.08%.  The substantial growth trend should continue into the foreseeable future due to the firm’s revenue growth rate track record as well as its ability to control costs.

Analyst Grade: A