Tesla's Financial Analysis Paper

Leverage Ratios and DuPont The leverage ratios indicate a company’s risk level associated with debt on the company’s balance sheet. According to Table 3, Tesla’s debt ratios from 2012 to 2014 all indicate the company assets are financed through debt, with 2012 being the highest of the three years. In 2013, the debt ratio was the lowest of all three years, which is due to the Gigafactory being built and Tesla paying off the last of the $465 million dollar loan the Department of Energy.
The DuPont ratio examines the equity multiplier, asset turnover, and net profit margin of a company to determine an in-depth analysis of a company’s ROE. By closely examining Tesla’s balance sheet, Tesla’s DuPont ratios indicate significant changes in ROE that as stated before is contributed to the company’s high production costs. The Equity Multiplier component of the DuPont formula was the lowest for Tesla in 2013, thus meaning Tesla’s reliance on debt was low because of the company paying …show more content…
The analysis includes closely examining a firm’s history, mission and vision, resource-based analysis, key success factors, and the attractiveness of the company within the industry itself.
Mission and Vision Tesla’s mission is to accelerate the world’s transition to sustainable energy by creating the most compelling car company of the 21st century by driving the world’s transition to electric vehicles. The company achieves its mission through its state of the art technology and innovative atmosphere promoted by its CEO, Elon Musk. According to the case, Elon Musk firmly visualizes Tesla “accelerating the world’s transition from a mine-and-burn hydrocarbon economy towards a solar electric economy” (pg.4). The company achieves this vision by producing vehicles that outperform gasoline-based vehicles in driving experience and