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 2023 Summary Income Statement
Column1	2023	2022	2021	2020	2019
Revenues	96,773	81,462	53,823	31,536	24,578
COGS	79,113	60,609	40,217	24,906	20,509
Gross Profit	17,660	20,853	13,606	6,630	4,069
SG&A	4,800	3,946	4,517	3,145	2,646
Depreciation	4,667	3,747	2,911	2,322	2,154
R & D	3,969	3,075	2,593	1,491	1,343
Other
Total Operating Expenses	8,769	7,197	7,083	4,636	4,138
EBIT	8,891	13,656	6,523	1,994	(69)
Other Income
Interest Expense	(156)	(191)	(371)	(748)	(685)
EBT	9,973	13,719	6,343	1,154	(665)
Taxes	(5,001)	1,132	699	292	110
Net Income	14,974	12,587	5,644	862	(775)

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 2023 Summary Balance Sheet
Column1	2023	2022	2021	2020	2019
Cash	16,398	16,253	17,576	19,384	6,268
Short Term Investment	12,696	5,932	131	-	-
Account Receivable	3,508	2,952	1,913	1,886	1,324
Inventory	13,626	12,839	5,757	4,101	3,552
Other
Current Assets	49,616	40,917	27,100	26,717	12,103
Net PPE	29,725	23,548	18,884	12,747	10,396
Goodwill	253	194	200	207	198
Other
Total Assets	106,618	82,338	62,131	52,148	34,309
Accounts Payable	14,431	15,255	10,025	6,051	3,771
Accrued Expense	9,080	8,205	5,719	3,855	2,905
Accrued Taxes
Notes Payable
LT Debt - Current	2,373	1,502	1,589	2,132	1,785
Other
Total Current Liabilities	28,748	26,709	19,705	14,248	10,667
LT Debt	2,857	1,597	5,245	9,556	11,634
Other
Total Liabilities	43,009	36,440	30,548	28,418	26,199
Common Stock	34,895	32,180	29,803	27,260	12,737
Treasury
Retained Earnings	27,882	12,885	331	(5,399)	(6,083)
Other
Total Equity	62,634	44,704	30,189	22,225	6,618
Total Equity & Liability	106,618	82,338	62,131	52,148	34,309

 

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