Financial Statement Research
Tesla Inc. has improved their financial status from 2015 to 2016.Their most significant improvements have been increasing their total equity from 1.1 billion to 4.7 billion, an increase by 320%! This is caused by a spike in both total assets (up 180%) and total liabilities (up 141%). The question is, where did these assets come from? Well, Tesla merged with SolarCity on Nov. 17th, 2016 [19], which is right around when Tesla’s total assets increased significantly [20]. With this merger, it would explain why their total assets and total liabilities increased, they would gain the assets of SolarCity, and their liabilities.
Throughout my research into the finances of Tesla Inc., one thing is very blatant, they aren’t …show more content…
has accomplished many things since its creation in 2003. However, it is still young compared to Ford Motor Company (1903) [14] and General Motors (1908) [15].
Ford Motor Company reported over four billion in net income, and General Motors reported over nine billion in net income [8]. Tesla Inc. reported over six-hundred million in net loss [8]! The sheer age difference of each company is a large factor. A company that has been around for over a century will have more of a fan-base and has more experience in how to produce, market, and the knowledge required to operate in the automotive industry.
The current ratio is the calculation of current assets divided by current liabilities. This calculation is vital for any company because it provides potential lenders how much collateral that company has. Potential investors also view it because it provides a simple numerical value to the company [16]. However, this one ratio does not provide enough information about the company, this is just a small portion of financial information that many people utilize to see the health of the company. For Tesla Inc., the current ratio is 1.074, for Ford Motor Company, 1.2, and for General Motors, 0.9. For these companies, they fall outside of the zone that is considered good, 1.5-2.0
Tesla Inc. has improved their financial status from 2015 to 2016.Their most significant improvements have been increasing their total equity from 1.1 billion to 4.7 billion, an increase by 320%! This is caused by a spike in both total assets (up 180%) and total liabilities (up 141%). The question is, where did these assets come from? Well, Tesla merged with SolarCity on Nov. 17th, 2016 [19], which is right around when Tesla’s total assets increased significantly [20]. With this merger, it would explain why their total assets and total liabilities increased, they would gain the assets of SolarCity, and their liabilities.
Throughout my research into the finances of Tesla Inc., one thing is very blatant, they aren’t …show more content…
has accomplished many things since its creation in 2003. However, it is still young compared to Ford Motor Company (1903) [14] and General Motors (1908) [15].
Ford Motor Company reported over four billion in net income, and General Motors reported over nine billion in net income [8]. Tesla Inc. reported over six-hundred million in net loss [8]! The sheer age difference of each company is a large factor. A company that has been around for over a century will have more of a fan-base and has more experience in how to produce, market, and the knowledge required to operate in the automotive industry.
The current ratio is the calculation of current assets divided by current liabilities. This calculation is vital for any company because it provides potential lenders how much collateral that company has. Potential investors also view it because it provides a simple numerical value to the company [16]. However, this one ratio does not provide enough information about the company, this is just a small portion of financial information that many people utilize to see the health of the company. For Tesla Inc., the current ratio is 1.074, for Ford Motor Company, 1.2, and for General Motors, 0.9. For these companies, they fall outside of the zone that is considered good, 1.5-2.0