QUESTION (17 marks)
Tesla Inc. describes itself as follows: We design, develop, manufacture, sell and lease high-performance fully electric vehicles and energy generation and storage systems, and offer services related to our products. … Our mission is to accelerate the world’s transition to sustainable energy. (Source: Tesla 2023 annual filing, also called “10-K” filing, in the US)
Tesla’s online FAQ notes: Tesla has never declared dividends on our common stock. We intendon retaining all future earnings to finance future growth and therefore, do not anticipate paying any cash dividends in the foreseeable future.
PART 1 (6 marks)
REQUIRED: Use Tesla’s balance sheet and income statement information. Determine the missing numbers.
|
|
ROW /COLUMN: |
A |
B |
C |
D |
E |
|
1 |
Balance Sheet, as at ($m USD) |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
2 |
Assets |
|
|
|
|
|
|
3 |
Cash |
16,398 |
16,253 |
17,576 |
19,384 |
6,268 |
|
4 |
Non-cash assets |
A4 |
66,085 |
44,555 |
32,764 |
28,041 |
|
5 |
Total assets |
A5 |
82,338 |
62,131 |
52,148 |
34,309 |
|
6 |
Total liabilities |
43,009 |
36,440 |
30,548 |
28,418 |
26,199 |
|
7 |
Equity: |
|
|
|
|
|
|
8 |
Contributed equity |
34,895 |
32,180 |
29,806 |
27,261 |
12,737 |
|
9 |
Retained earnings (deficit) |
A9 |
12,885 |
329 |
(5,399) |
(6,083) |
|
10 |
Other equity and items |
832 |
833 |
1,448 |
1,868 |
1,456 |
|
11 |
Total Equity |
A11 |
45,898 |
31,583 |
23,730 |
8,110 |
|
13 |
|
|
|
|
|
|
|
14 |
Income Statement, for fiscal year ($m USD) |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
15 |
Revenues |
96,773 |
81,462 |
53,823 |
31,536 |
24,578 |
|
16 |
Cost of revenues |
A16 |
60,609 |
40,217 |
24,906 |
20,509 |
|
17 |
Gross profit |
A17 |
20,853 |
13,606 |
6,630 |
4,069 |
|
18 |
Other expenses and items |
2,663 |
8,297 |
8,087 |
5,909 |
4,931 |
|
19 |
Net income attributable to Tesla shareholders |
14,997 |
12,556 |
5,519 |
721 |
(862) |
|
A4: Non-cash assets on Dec. 31, 2023 |
|
A5: Total assets on Dec. 31, 2023 |
|
A9: Retained earnings on Dec. 31, 2023 |
|
A11: Total equity on Dec. 31, 2023 |
|
A16: Cost of revenues for year ending Dec. 31, 2023 |
A17: Gross profit for year ending Dec. 31, 2023
PART 2 (2 marks)
REQUIRED: Use Tesla’s financial information (including from previous page) to calculate the two key ratios for 2023.
|
Ratio |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Debt-to-Equity ratio |
|
0.79 |
0.97 |
1.20 |
3.23 |
|
Return on Equity ratio |
|
32% |
20% |
5% |
-12% |
Debt-to-Equity ratio on Dec. 31, 2023:
Return on Equity ratio for year ending December 31, 2023:
PART 3 (4 marks)
REQUIRED: How are Tesla’s assets financed, and how has this changed overtime? What do you expect going forward?
PART 4 (5 marks)
REQUIRED: Classify Tesla’s 2023 cash transactions below as operating, investing, or financing. Write “+” (if cash is increasing) or “-” (if cash is decreasing) in the correct column.
|
Transaction |
Operating |
Investing |
Financing |
|
Tesla paid $19.1 billion to purchase financial investments (e.g., shares of other companies) |
|
|
|
|
Tesla paid $8.9 billion to purchase property and equipment |
|
|
|
|
Tesla borrowed $3.9 billion in debt |
|
|
|
|
Tesla repaid $1.4 billion in debt |
|
|
|
|
Tesla received $12.5 billion from sale and maturities of financial |
