Tesla Financial Report and Financial Analysis: 2015 to 2019

Tesla Inc. Financial Report and Financial Analysis started with an in-depth review of Tesla's 10k Annual report, specifically, Tesla's income statement and balance sheet. 

Next Paul Borosky, MBA., summarized their financial information and input it into a proprietary financial model, which shows their income statement and balance sheet trends as well as calculations for Tesla's financial ratios, and financial ratio trends covering 5 years.

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Tesla Financial Report and Analysis by Paul Borosky, MBA.
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Each Public Company Financial Report will include:

  • Summarized income statement for the last 5 years.
  • Summarized balance sheet for the last 5 years.
  • Summary analysis by myself of important income statement, balance sheet, and financial ratio trends and other happenings.
  • Five year’s worth of over twenty common financial ratios presented with formulas, calculations, and analysis tips for each ratio.
  • Line by line description, explanation, and analysis tip for most financial statement line items and financial ratios.
  • Professional financial analysis tips provided in each section to help YOU conduct your OWN financial analysis!
  • Each section includes an “in other words” segment.  This is were the researcher uses plain English to explain finance concepts.

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Tesla Inc. Summary

Tesla’s stock price was $99.72 as of June 20th, 2019.  In the next 52 weeks, the stock price soared to $1,1012.78.  This is a growth rate annually of 354.16%.  From an investor’s perspective, this growth rate well exceeds overall market returns.

Tesla has not been paying dividends over the last five years.  There are a couple of common reasons why an organization does not pay dividends.  First, the company has no net profits and cannot afford to pay dividends.  In this case, investors should be wary of the company’s future growth.  Or, which is more likely the case for Tesla, is that the company is reinvesting profits and funds into revenue-generating projects. 

Tesla Income Statement Summary

Cost of Goods

In 2015, Tesla’s cost of goods was approximately $3.1 billion.  As compared to revenues, the percentage rate would be 77.2%.  In the next four years, the cost of goods as compared to revenues would significantly increase ending 2019 at 83.4%.  This would be an average growth rate of approximately 62.5%.  From an investor’s perspective, this should be most concerning.  This is because as noted previously, the company’s average revenue growth rate for the last five years with about 60% whereas their cost of goods are growing at 62.5%.  Unfortunately, this strategy cannot continue for the long or even the intermediate term.  Eventually, the cost of goods will eat up too much of the organization’s profits.  This will inevitably drive the Corporation to increase prices or do a better job negotiating raw material cost for their cars and other products.

Tesla Income Statement 2019

Column1 2019 2018 2017 2016 2015
Revenues                    24,578                    21,461                    11,759                      7,000                        4,046
COGS                    20,509                    17,419                      9,536                      5,400                        3,122
Gross Profit                      4,069                      4,042                      2,223                      1,599                           923
SG&A                      2,646                      2,835                      2,477                      1,432                           922
Depreciation                      2,154                      1,901                      1,636                         947                           422
R & D
Other
Operating Expenses                      4,138                      4,430                      3,855                      2,266                        1,640
EBIT                          (69)                        (388)                     (1,632)                        (667)                         (716)
Other Income
Interest Expense                         685                         663                         471                         198                           118
EBT                        (665)                     (1,005)                     (2,209)                        (746)                         (875)
Taxes                         110                           58                           32                           26                             13
Net Income                       (775)                   (1,063)                   (2,241)                       (773)                        (888)

Tesla Balance Sheet Summary

Accounts Receivables

In 2015, Tesla had Accounts Receivable at $158 million.  In the next four years, their Accounts Receivable would increase substantially ending 2019 at $1.3 billion.  As compared to sales, in 2015, Accounts Receivable was approximately 4.2%.  In the next year, ending 2016, the percent of sales for Accounts Receivable would grow substantially to 7.1%.  This indicates that the organization is doing a poor job or was doing a poor job in collecting funds do.  Fortunately, though, the company would improve its Accounts Receivable, as a percentage of sales, in 2017, ending the year at 4.4%.  Further, the organization would maintain this position for 2018.  However, in 2019, the Accounts Receivable, as compared to sales, would start to increase again ending the year at 5.4%.  From an investor’s perspective, this is most concerning.  If the organization continues to increase its Accounts Receivable, as compared to sales, then the firm may run into cash issues.  When this happens, an organization often relies upon additional debt for funding.  Not a great position or strategy for any organization, especially one seeking to grow substantially in a highly competitive field.

Tesla Balance Sheet 2019

Column1 2019 2018 2017 2016 2015
Cash                        6,268                    3,686                    3,367                    3,393                    1,196
Short Term Investment                              -                         -                         -                         -                         -
Account Receivable                        1,324                       949                       515                       499                       168
Inventory                        3,552                    3,113                    2,263                    2,067                    1,277
Other
Current Assets                    12,103                  8,307                  6,570                  6,259                  2,791
Net PPE                      10,396                  11,330                  10,027                    5,982                    3,403
Goodwill                           198                         68                         60                         -
Other
Total Assets                    34,309                29,740                28,655                22,664                  8,092
Accounts Payable                        3,771                    3,405                    2,390                    1,860                       916
Accrued Expense                        2,905                    2,094                    1,731                    1,210                       422
Accrued Taxes
Notes Payable
LT Debt - Current                        1,785                    2,568                    9,415                    5,860                       633
Other
Total Current Liabilities                      10,667                    9,993                    7,674                    5,827                    2,816
LT Debt                      11,634                    9,404                    9,415                    5,860                    2,040
Other
Total Liabilities                    26,199                23,427                23,022                16,750                  6,961
Common Stock                      12,737                  10,249                    9,178                    7,773                    3,414
Treasury
Retained Earnings                      (6,083)                  (5,318)                  (4,974)                  (2,997)                  (2,322)
Other
Total Equity                       6,618                  4,923                  4,237                  4,752                  1,088
Total Equity & Liability                    34,309                29,740                28,655                22,664                  8,092

Tesla Financial Ratio Summary and Analysis

Quick Ratio

Tesla had a quick ratio ending 2015 at .54.  In the next year, the company would increase its quick ratio ending 2016 at .72.  In the next two years, similar to their current and cash ratio trends, the organization would continually decrease its quick ratio ending 2018 at .52.  Fortunately, the organization would rebound its quick ratio ending 2018 at .8.  From an investor’s perspective, the organization seems to be lacking significant inventory.  This is a huge problem due to other competitors in the industry at being flush with products that customers can pick up immediately.  Just take a look at any Ford or Honda dealership.

Inventory Turnover

Tesla ended 2015 with a 3.17 inventory turnover.  In the next four years, the organization would continually improve their inventory turnover ending 2019 at 6.92.  This means to me that the firm is practically selling their cars and other products before they are off the inventory conveyor belt.  This is a great problem to have.  However, if this continues in the long-term, then customers may become sick of waiting for products to be built.  To mitigate this problem, the organization needs to heavily invest in fixed assets.  The thought behind this recommendation is that the more plants they have and the more equipment they have the more cars they can build.  Pretty straightforward.

Net Profit Margin

Tesla ended 2015 with a -21.95% net profit margin.  In the next year, the company would improve the net profit margin ending 2016 at -11.04%.  However, 2017 seems to be a really difficult year for the organization.  For net profits, the organization would post -19.06%.  As with return on equity and return on assets, the organization would improve the net profit margin in 2018 and 2019 ending 2019 at -3.15%.  Based on the substantial increase in the organization stock prices, it seems like investors are expecting the organization to post a positive net profit in the next year.

Tesla Liquidity Ratios 2019

Ratios 2019 2018 2017 2016 2015
Current Ratio                           1.13                    0.83
Cash Ratio                           0.59                    0.37
Quick Ratio                           0.80                    0.52
Net Working Capital                         4,468                  2,249

Tesla Asset Utilization 2019

Ratios 2019 2018 2017 2016 2015
Total Asset Turnover                           0.72                    0.72
Fixed Asset Turnover                           2.36                    1.89
Days Sales Outstanding                         19.66                  16.14
Inventory Turnover                           6.92                    6.89
Accounts Receivable Turnover                         18.56                  22.61
Working Capital Turnover                           5.50                    9.54
AP Turnover                           6.52                    6.30
Average Days Inventory                           0.02                    0.02
Average Days Payable                           0.02                    0.02

Tesla Profitability Ratios 2019

Ratios 2019 2018 2017 2016 2015
Return on Assets -2.26% -3.57%
Return on Equity -11.71% -21.59%
Net Profit Margin -3.15% -4.95%
Gross Profit Margin 16.56% 18.83%
Operating Profit Margin -0.28% -1.81%
Basic Earning Power -0.20% -1.30%
ROCE -0.29% -1.96%
Capital Employed                       23,642                19,747
ROIC -0.54% -3.02%

Tesla Long-term Debt 2019

Ratios 2019 2018 2017 2016 2015
Debt Ratio 33.91% 31.62%
Debt/Equity 175.79% 191.02%
Times Interest Earned                         (0.10)                  (0.59)