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Running Head: FINANCIAL REPORT
7
FINANCIAL REPORT
Financial Report
Name
Institution Affiliation
Financial Report
Introduction
Tesla, Inc. is an American company that deals with the manufacturing of electric automobiles, home power storage, solar panels, and batteries for cars. It is formerly known as Tesla motors. In 2003, Marc Tarpenning and Martin Eberhard found the company and named it after “Nikola Tesla who was a Serbian American inventor” (Tesla, Inc. | History, Cars, Elon Musk, & Facts, 2021). The purpose for forming tesla was to develop an electric sports car. At the time, Eberhard was the chief executive officer and Tarpening was the chief financial officer. The company had to come up with a way of funding which was obtained from various sources. Elon Musk contributed not less than 30 million dollars to the company which was just established. Elon Musk then served as the chairman of the company from the beginning of 2004.
Tesla Motors released their first ever electric car known as Roadster. The roadster was a huge success for the company since it achieved 394 km on a single charge which was unexpected range for production of an electric car. After further testing the car, it indicated that its performance was the same with that of gasoline-powered sports car (Tesla, Inc. | History, Cars, Elon Musk, & Facts, 2021). The roadster was able to accelerate from o to 96 kilometers per hour in less than four seconds. The car body which was of lightweight was made from carbon fibre. The car produced emissions of tailpipe since it did not use internal combustion engine. The roadster was luxury and it costs $109,000.
In 2008, Musk took over as the new chief executive officer of Tesla Motors. Thereafter, in 2010 the company initial public offering raised $226 million (Tesla, Inc. | History, Cars, Elon Musk, & Facts, 2021). Tesla Motors undergone vigorous development under the leadership of Elon Musk that saw the company making profits in the years that followed. Tesla Motors had 48, 016 full-time employees at December 31, 2019.
Selected Consolidated Financial Data
According to company report, on November 21, 2016 it acquired SolarCity Corporation and its financial results were included in the company financial results. In 2018, the company also adopted ASC 606. The table below shows the data
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Year Ended December 31, |
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2019 |
2018 |
2017 |
2016 |
2015 |
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“Consolidated Statements of Operations Data:” |
|
|
|
|
|
|
Total revenues |
$24,578 |
$21,461 |
$11769 |
7000 |
4046 |
|
Gross profit |
4069 |
4042 |
2223 |
1599 |
924 |
|
“Loss from operations” |
(69) |
(388) |
(1632) |
(667) |
(717) |
|
“Net loss attributable to common stockholders” |
(862) |
(976) |
(1962) |
(675) |
(889) |
|
“Net loss per share of common stock attributed to common stockholders, basic and diluted” |
(4.92) |
(5.72) |
(11.83) |
(4.68) |
(6.93) |
|
“Weighted average shares used in computing net loss per share of common stock, basic and diluted” |
177 |
171 |
166 |
144 |
128 |
|
|
As of December 31, |
||||
|
|
2019 |
2018 |
2017 |
2016 |
2015 |
|
“Consolidated Balance Sheet Data” |
|
|
|
|
|
|
“Working (deficit) capital” |
1436 |
(1686) |
(1104) |
433 |
(29) |
|
Total assets |
34300 |
20740 |
28655 |
22664 |
8068 |
|
Total long-term obligations |
15532 |
13434 |
15348 |
10923 |
4126 |
Tesla Motors
Income statement
|
Breakdown |
TTM |
12/30/2020 |
12/30/2019 |
12/30/2018 |
12/30/2017 |
|
Total Revenue |
41,862,000 |
31,536,000 |
24,578,000 |
21,461,268 |
11,758,751 |
|
Cost of Revenue |
32,634,000 |
24,906,000 |
20,509,000 |
17,419,247 |
9,536,264 |
|
Gross Profit |
9,228,000 |
6,630,000 |
4,069,000 |
4,042,021 |
2,222,487 |
|
Operating Expense |
6,016,000 |
4,636,000 |
3,989,000 |
4,294,861 |
3,854,573 |
|
Operating Income |
3,212,000 |
1,994,000 |
80,000 |
-252,840 |
-1,632,086 |
|
“Net Non Operating Interest Income Expense” |
-550,000 |
-718,000 |
-641,000 |
-638,538 |
-451,573 |
|
“Other Income Expense” |
98,000 |
-122,000 |
-104,000 |
-113,367 |
-125,373 |
|
“Pretax Income” |
2,760,000 |
1,154,000 |
-665,000 |
-1,004,745 |
-2,209,032 |
|
Tax Provision |
453,000 |
292,000 |
110,000 |
57,837 |
31,546 |
|
“Net Income Common Stockholders” |
2,150,000 |
690,000 |
-862,000 |
-976,091 |
-1,961,400 |
|
“Diluted NI Available to Com Stockholders” |
2,150,000 |
690,000 |
-862,000 |
-976,091 |
-1,961,400 |
|
“Basic EPS” |
- |
0.74 |
-0.98 |
-1.14 |
-2.37 |
|
“Diluted EPS” |
- |
0.64 |
-0.98 |
-1.14 |
-2.37 |
|
“Basic Average Shares” |
- |
933,000 |
885,000 |
852,625 |
828,790 |
|
“Diluted Average Shares” |
- |
1,083,000 |
885,000 |
852,625 |
828,790 |
|
“Total Operating Income as Reported” |
3,290,000 |
1,994,000 |
-69,000 |
-388,073 |
-1,632,086 |
|
“Total Expenses” |
38,650,000 |
29,542,000 |
24,498,000 |
21,714,108 |
13,390,837 |
|
“Net Income from Continuing & Discontinued Operation” |
2,150,000 |
690,000 |
-862,000 |
-976,091 |
-1,961,400 |
|
“Normalized Income” |
2,084,802 |
690,000 |
-738,330 |
-877,371 |
-1,961,400 |
|
“Interest Income” |
33,000 |
30,000 |
44,000 |
24,533 |
19,686 |
|
“Interest Expense” |
583,000 |
748,000 |
685,000 |
663,071 |
471,259 |
|
“Net Interest Income” |
-550,000 |
-718,000 |
-641,000 |
-638,538 |
-451,573 |
|
“EBIT” |
3,343,000 |
1,902,000 |
20,000 |
-341,674 |
-1,737,773 |
|
“EBITDA” |
5,847,000 |
- |
- |
- |
- |
|
“Reconciled Cost of Revenue” |
32,634,000 |
24,906,000 |
20,509,000 |
17,419,247 |
9,536,264 |
|
“Reconciled Depreciation” |
2,504,000 |
2,322,000 |
2,154,000 |
1,901,050 |
1,636,003 |
|
“Net Income from Continuing Operation Net Minority Interest” |
2,150,000 |
690,000 |
-862,000 |
-976,091 |
-1,961,400 |
|
“Total Unusual Items Excluding Goodwill” |
78,000 |
0 |
-149,000 |
-135,233 |
- |
|
“Total Unusual Items” |
78,000 |
0 |
-149,000 |
-135,233 |
- |
|
“Normalized EBITDA” |
5,769,000 |
4,224,000 |
2,323,000 |
1,694,609 |
-101,770 |
|
“Tax Rate for Calcs” |
0 |
0 |
0 |
0 |
0 |
|
“Tax Effect of Unusual Items” |
12,802 |
0 |
-25,330 |
-36,513 |
0 |
Tesla Motors
Balance Sheet
|
Breakdown |
12/30/2020 |
12/30/2019 |
12/30/2018 |
12/30/2017 |
|
“Total Assets” |
52,148,000 |
34,309,000 |
29,739,614 |
28,655,372 |
|
“Total Liabilities Net Minority Interest” |
29,073,000 |
26,842,000 |
23,981,974 |
23,420,784 |
|
“Total Equity Gross Minority Interest” |
23,075,000 |
7,467,000 |
5,757,640 |
5,234,588 |
|
“Total Capitalization” |
30,738,000 |
17,020,000 |
13,333,733 |
13,655,631 |
|
“Common Stock Equity” |
22,225,000 |
6,618,000 |
4,923,243 |
4,237,242 |
|
“Capital Lease Obligations” |
3,008,000 |
2,896,000 |
3,194,796 |
1,801,010 |
|
“Net Tangible Assets” |
21,705,000 |
6,081,000 |
4,572,592 |
3,815,503 |
|
“Working Capital” |
12,469,000 |
1,436,000 |
-1,685,828 |
-1,104,150 |
|
“Invested Capital” |
32,496,000 |
18,419,000 |
15,555,718 |
14,552,180 |
|
“Tangible Book Value” |
21,705,000 |
6,081,000 |
4,572,592 |
3,815,503 |
|
“Total Debt” |
13,279,000 |
14,697,000 |
13,827,271 |
12,115,948 |
|
“Net Debt” |
- |
5,533,000 |
6,946,857 |
6,947,024 |
|
“Share Issued” |
960,000 |
905,310 |
863,013 |
843,985 |
|
“Ordinary Shares Number” |
960,000 |
905,310 |
863,013 |
843,985 |
Tesla Motors Financial Ratios
Detailed Ratio Analysis
Liquidity ratios measure the ability of the company to meet its short term obligations. It shows how a company can convert its assets to cash with loss or profit. For a company to be successful and make good profits, it should have favorable liquidity ratios. Also, it shows the ability of the company to pay its creditors at the shortest time possible.
Current Ratio
The ratio shows how many times short term assets can cover short-term liabilities. It also indicates the ability of the company to pay its current obligations. High number is favorable to the company since it shows a strong capability to pay short-term obligation. The current ratio of Tesla Inc. is 1.88, which compared to the previous year current ratio of 1.13 indicates the ability of the company to pay its short-term obligations.
Quick Ratio
“It is also called the acid test ratio. It measures the immediate liquidity which is the number of times cash, marketable securities, and account receivable cover short term obligations. Like current ratio, the higher number is preferred since it shows a company’s strong ability to pay its short-term obligations. The quick ratio for Tesla Inc. is 1.49 which compared to the prior year it indicates that the company has a strong ability to meet its short term obligations (Yahoo is now a part of Verizon Media, 2021).”
Cash Ratio
“It is the ratio of a company’s total cash and cash equivalents to its current liabilities. The higher ratio is preferred because it indicates the company is able to pay its obligations. The Cash ratio for Tesla Inc. is 1.36 which compared to the cash ratio of the prior year shows that the company can comfortably pay its short term obligations (Yahoo is now a part of Verizon Media, 2021).”
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Tesla Inc. |
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Liquidity Ratios |
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Dec 31, 2020 |
Dec 31, 2019 |
Dec 31, 2018 |
Dec 31, 2017 |
Dec 31, 2016 |
|
Current ratio |
1.88 |
1.13 |
0.83 |
0.86 |
1.07 |
|
Quick ratio |
1.49 |
0.71 |
0.46 |
0.51 |
0.67 |
|
Cash ratio |
1.36 |
0.59 |
0.37 |
0.44 |
0.58 |
|
“Based on: 10-K (filing date: 2021-02-08), 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01).” |
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Tesla Inc. |
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Solvency Ratios |
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Dec 31, 2020 |
Dec 31, 2019 |
Dec 31, 2018 |
Dec 31, 2017 |
Dec 31, 2016 |
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“Debt Ratios” |
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|
“Debt to equity” |
0.53 |
2.03 |
2.43 |
2.43 |
1.50 |
|
“Debt to equity (including operating lease liability)” |
0.60 |
2.21 |
2.43 |
2.43 |
1.50 |
|
“Debt to capital” |
0.34 |
0.67 |
0.71 |
0.71 |
0.60 |
|
“Debt to capital (including operating lease liability)” |
0.37 |
0.69 |
0.71 |
0.71 |
0.60 |
|
“Debt to assets” |
0.22 |
0.39 |
0.40 |
0.36 |
0.31 |
|
“Debt to assets (including operating lease liability)” |
0.25 |
0.43 |
0.40 |
0.36 |
0.31 |
|
“Financial leverage” |
2.35 |
5.18 |
6.04 |
6.76 |
4.77 |
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“Coverage Ratios” |
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“Interest coverage” |
2.54 |
0.03 |
-0.52 |
-3.69 |
-2.75 |
|
“Fixed charge coverage” |
1.96 |
0.40 |
-0.19 |
-2.40 |
-1.36 |
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“Based on: 10-K (filing date: 2021-02-08), 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01).” |
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Debt to Equity
Conclusions
The five year trend financial analysis of Tesla Inc. indicates that the company is improving gradually and realizing more profits. The liquidity ratios show how the company is able to settle its short-time liabilities in time thereby creating good relations with its creditors. The sales of the company have been improving over the last five years and now they are in a good position to even sell more. The huge sales can be traced back to the new products that the company introduced. Also, the company has good investment decisions resulting to more income for the company. When the company is compared to their close competitors it can be seen that the company is doing well.
References
Encyclopedia Britannica. 2021. Tesla, Inc. | History, Cars, Elon Musk, & Facts. [online] Available at: <https://www.britannica.com/topic/Tesla-Motors> [Accessed 14 September 2021].
Finance.yahoo.com. 2021. Yahoo is now a part of Verizon Media. [online] Available at: <https://finance.yahoo.com/quote/TSLA/financials/> [Accessed 14 September 2021].
Motors, T., 2015. About Tesla. Retrieved November, 22, p.2015.
Petro, S., BUSINESS AND FINANCIAL ANALYSIS OF TESLA INC.
