Using the four-year financial statements of Tesla 2017-2020 (Appendix 2), evaluate and explain the profitability, solvency, liquidity, activity and market dimensions of Tesla’s financial performance highlighting the main weaknesses and strengths of Tesla.

Consolidated Statements of Cash Flows
(in millions of $)

Items 2017 2018 2019 2020

Cash Flows from Operating Activities

Net income (loss) (2,241) (1,063) (775) 862

Adjustments to reconcile net income (loss) to net cash provided by
operating activities:

Depreciation, amortization and impairment 1,636 1,901 2,154 2,322

Stock-based compensation 467 749 898 1,734

Amortization of debt discounts and issuance costs 91 159 188 180

Inventory and purchase commitments write-downs 132 85 193 202

Loss on disposals of fixed assets 106 162 146 117

Foreign currency transaction net loss (gain) 52 (2) (48) 114

Loss (gain) related to SolarCity acquisition 58 --- --- ---

Non-cash interest and other operating activities 135 49 186 228

Operating cash flow related to repayment of discounted
convertible senior notes --- — (188) —

Changes in operating assets and liabilities, net of effect of
business combinations:

Accounts receivable (25) (497) (367) (652)

Inventory (179) (1,023) (429) (422)

Operating lease vehicles (1,523) (215) (764) (1,072)

Prepaid expenses and other current assets (72) (82) (288) (251)

Other non-current assets (15) (207) 115 (344)

Accounts payable and accrued liabilities 388 1,797 646 2,102

Deferred revenue 469 406 801 321

Customer deposits 170 (96) (58) 7

Resale value guarantee 209

Other long-term liabilities 81 (25) (5) 495

Net cash provided by operating activities (61) 2,098 2,405 5,943

Cash Flows from Investing Activities

Purchases of property and equipment excluding finance leases, net
of sales (3,415) (2,101) (1,327) (3,157)

Purchases of solar energy systems, net of sales (667) (218) (105) (75)

Receipt of government grants --- — 46 123

Purchase of intangible assets --- — (5) (10)

Business combinations, net of cash acquired (115) (18) (45) (13)

Net cash used in investing activities (4,197) (2,337) (1,436) (3,132)

Cash Flows from Financing Activities

Proceeds from issuances of common stock in public offerings, net of
issuance costs 400 — 848 12,269

Proceeds from issuances of convertible and other debt 7,138 6,176 10,669 9,713

Repayments of convertible and other debt (3,995) (5,247) (9,161) (11,623)

Repayments of borrowings issued to related parties (165) (100) — —

Collateralized lease repayments 511 (559) (389) (240)

Proceeds from exercises of stock options and other stock issuances 259 296 263 417

Principal payments on finance leases (103) (181) (321) (338)

Debt issuance costs (63) (15) (37) (6)

Purchase of convertible note hedges (204) — (476) —

Proceeds from settlement of convertible note hedges 287 --- --- ---

Proceeds from issuance of warrants 53 — 174 —

Payments for settlements of warrants (230)

Proceeds from investments by noncontrolling interests in subsidiaries 790 437 279 24

Distributions paid to noncontrolling interests in subsidiaries (262) (227) (311) (208)

Payments for buy-outs of noncontrolling interests in subsidiaries --- (6) (9) (35)

Net cash provided by financing activities 4,416 574 1,529 9,973

Effect of exchange rate changes on cash and cash equivalents and
restricted cash 40 (23) 8 334

Net increase in cash and cash equivalents and restricted cash 198 312 2,506 13,118

Cash and cash equivalents and restricted cash, beginning of period 3,767 3,965 4,277 6,783

Cash and cash equivalents and restricted cash, end of period 3,965 4,277 6,783 19,901

Supplemental Non-Cash Investing and Financing Activities

Equity issued in connection with business combination 10 — 207 —

Acquisitions of property and equipment included in liabilities 914 249 562 1,088

Estimated fair value of facilities under build-to-suit leases 313 94 — —

Supplemental Disclosures

Cash paid during the period for interest, net of amounts capitalized 183 381 455 444

Cash paid during the period for taxes, net of refunds 66 35 54 115

Transcribed Image Text:Tesla, Inc. Consolidated Statements of Operations (in millions of $, except per share data) Year Ended December 31, Revenues 2017 2018 2019 2020 Automotive sales 8,535 17,632 19,952 26, 184 Automotive leasing 1,107 883 869 1,052 Total automotive revenues 9,642 18,515 20,821 27,236 Energy generation and storage Services and other 1.116 1.555 1,531 1.994 1,001 1,391 2,226 2,306 Total revenues 11,759 21,461 24,578 31,536 Cost of revenues Automotive sales 6,725 13,686 15,939 19,696 Automotive leasing 708 488 459 563 Total automotive cost of revenues 7,433 14,174 16,398 20,259 Energy generation and storage 875 1,365 1,341 1,976 Services and other 1,229 1,880 2,770 2,671 Total cost of revenues 9,537 17,419 20,509 24,906 Gross profit Operating expenses 2,222 4,042 4,069 6,630 Research and development 1,378 1,460 1,343 1,491 Selling, general and administrative Restructuring and other Total operating expenses Income (loss) from operations Interest income Interest expense 2.477 2,835 2,646 3,145 135 149 3,855 (1,633) 4,430 4.138 4,636 (388) (69) 1,994 20 24 44 30 (471) (663) (685) (748) Other (expense) income, net Income (loss) before income taxes (125) 22 45 (122) (2,209) (1,005) (665) 1,154 Provision for income taxes Net income (loss) Net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests in subsidiaries 32 58 110 292 (2,241) (1,063) (775) 862 (279) (87) (976) 87 141 Net income (loss) attributable to common stockholders (1,962) (862) 721 Less: Buy-out of noncontrolling interest Net income (loss) used in computing net income (loss) per share of common stock 8. 31 (1,962) (976) (870) 690 Net income (loss) per share of common stock attributable to common stockholders Basic (11.83) (5.72) (0.98) 0.74 Diluted (11.83) (5.72) (0.98) 0.64 Weighted average shares used in computing net income (loss) per share of common stock Basic 166 171 887 933 Diluted 166 171 887 1,083 - --T
Transcribed Image Text:Appendix (2) Tesla, Inc. Consolidated Balance Sheets (in millions of $, except per share data) December 31, December 31, December 31, December 31, 2017 2018 2019 2020 Assets Current assets Cash and cash equivlents 3,368 3,686 6,268 19.384 Restricted cash 155 193 Accounts receivable, net 515 949 1,324 1,886 Inventory 2,264 1,113 3,552 4,101 Prepaid expenses and other current assets 268 366 950 1,346 Total current assets 6,570 8.307 12,103 26.717 Operating lnase vehicles net 4,117 2.000 3,001 2,447 Solar energy systems, leased and to be leased, net 6.347 6.271 8,138 5,979 Property, plant and equipment, net 10.028 11.330 10,396 12,747 Operating lease right-of-use assets ntangible assets, net 1,218 1558 362 282 339 313 Goodwil 60 68 198 207 MyPower customer notes receivable, net of current portion 457 422 Restricted cash, net of current portion 442 398 Other assets 273 572 1,470 1.636 Total assets 28,656 29,740 34,309 52,148 Liabilities Current labilites Accounts payable 2.390 3.404 3,771 6,061 Accrued liabilities and other 1,732 2.094 3,222 3,866 Deferred revenue 1,015 630 1,163 1,458 Resale value guarantees 787 503 Customer deposts 854 793 726 752 Curent portion of long-term debt and capital leases 797 2.568 1,786 2,132 Cument potion of promissory notes issued to related parties 100 Total current liabilities 7,675 9.992 10,667 14,248 Long-term debt and capital leases, net ot cuttert portion 9,418 9.404 11,634 9.566 Delerred vere, net of cument portion 1.178 901 1,207 1,284 Resale value guarantees, net of current portion 2.309 329 Other long-tem labilities 2.443 2.710 2.601 3,330 Total liabilities Commitments and contingencies 23.023 21426 20,199 28,418 15 Redeomable noncontroling interests in sutsidiaries 398 565 843 604 Conventble senior notes 51 Equity Stockholders' equity Preferred stock; $0.001 par value, 100 shares authorized; no shares issued and outstanding Common stock; $0.001 par value; 2.000 shares auhorited 960, 905, 173 and 160 shares issued and outstanding as of December 31, 2020, 2019, 2018 and 2017, respectively Additional paidin capital 9,178 10.250 12,737 27.201 Accumulated other comprehensive loss) income 33 (8) (36) 363 Accumulated detice (4,974) (5.318) (6,083) (5,399) Total stockholdens equity 4,237 4,924 6,618 22,225 Nancontraling interests in subsidaries 998 834 B49 Total liabilities and equity 28.656 29,740 34.309 52.148

Name: Using the four-year financial statements of Tesla 2017-2020 (Appendix
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Description: Using the four-year financial statements of Tesla 2017-2020 (Appendix 2), evaluate and explain the profitability, solvency, liquidity, activity and market dimensions of Tesla’s financial performance highlighting the main weaknesses and strengths of T

Question

Using the four-year financial statements of Tesla 2017-2020 (Appendix 2), evaluate and explain the profitability, solvency, liquidity, activity and market dimensions of Tesla’s financial performance highlighting the main weaknesses and strengths of Tesla.

Consolidated Statements of Cash Flows (in millions of $)
Items	2017	2018	2019	2020
Cash Flows from Operating Activities
Net income (loss)	(2,241)	(1,063)	(775)	862
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization and impairment	1,636	1,901	2,154	2,322
Stock-based compensation	467	749	898	1,734
Amortization of debt discounts and issuance costs	91	159	188	180
Inventory and purchase commitments write-downs	132	85	193	202
Loss on disposals of fixed assets	106	162	146	117
Foreign currency transaction net loss (gain)	52	(2)	(48)	114
Loss (gain) related to SolarCity acquisition	58	---	---	---
Non-cash interest and other operating activities	135	49	186	228
Operating cash flow related to repayment of discounted convertible senior notes	---	—	(188)	—
Changes in operating assets and liabilities, net of effect of business combinations:
Accounts receivable	(25)	(497)	(367)	(652)
Inventory	(179)	(1,023)	(429)	(422)
Operating lease vehicles	(1,523)	(215)	(764)	(1,072)
Prepaid expenses and other current assets	(72)	(82)	(288)	(251)
Other non-current assets	(15)	(207)	115	(344)
Accounts payable and accrued liabilities	388	1,797	646	2,102
Deferred revenue	469	406	801	321
Customer deposits	170	(96)	(58)	7
Resale value guarantee	209
Other long-term liabilities	81	(25)	(5)	495
Net cash provided by operating activities	(61)	2,098	2,405	5,943
Cash Flows from Investing Activities
Purchases of property and equipment excluding finance leases, net of sales	(3,415)	(2,101)	(1,327)	(3,157)
Purchases of solar energy systems, net of sales	(667)	(218)	(105)	(75)
Receipt of government grants	---	—	46	123
Purchase of intangible assets	---	—	(5)	(10)
Business combinations, net of cash acquired	(115)	(18)	(45)	(13)
Net cash used in investing activities	(4,197)	(2,337)	(1,436)	(3,132)
Cash Flows from Financing Activities
Proceeds from issuances of common stock in public offerings, net of issuance costs	400	—	848	12,269
Proceeds from issuances of convertible and other debt	7,138	6,176	10,669	9,713
Repayments of convertible and other debt	(3,995)	(5,247)	(9,161)	(11,623)
Repayments of borrowings issued to related parties	(165)	(100)	—	—
Collateralized lease repayments	511	(559)	(389)	(240)
Proceeds from exercises of stock options and other stock issuances	259	296	263	417
Principal payments on finance leases	(103)	(181)	(321)	(338)
Debt issuance costs	(63)	(15)	(37)	(6)
Purchase of convertible note hedges	(204)	—	(476)	—
Proceeds from settlement of convertible note hedges	287	---	---	---
Proceeds from issuance of warrants	53	—	174	—
Payments for settlements of warrants	(230)
Proceeds from investments by noncontrolling interests in subsidiaries	790	437	279	24
Distributions paid to noncontrolling interests in subsidiaries	(262)	(227)	(311)	(208)
Payments for buy-outs of noncontrolling interests in subsidiaries	---	(6)	(9)	(35)
Net cash provided by financing activities	4,416	574	1,529	9,973
Effect of exchange rate changes on cash and cash equivalents and restricted cash	40	(23)	8	334
Net increase in cash and cash equivalents and restricted cash	198	312	2,506	13,118
Cash and cash equivalents and restricted cash, beginning of period	3,767	3,965	4,277	6,783
Cash and cash equivalents and restricted cash, end of period	3,965	4,277	6,783	19,901
Supplemental Non-Cash Investing and Financing Activities
Equity issued in connection with business combination	10	—	207	—
Acquisitions of property and equipment included in liabilities	914	249	562	1,088
Estimated fair value of facilities under build-to-suit leases	313	94	—	—
Supplemental Disclosures
Cash paid during the period for interest, net of amounts capitalized	183	381	455	444
Cash paid during the period for taxes, net of refunds	66	35	54	115

Tesla, Inc.
Consolidated Statements of Operations
(in millions of $, except per share data)
Year Ended December 31,
Revenues
2017
2018
2019
2020
Automotive sales
8,535
17,632
19,952
26, 184
Automotive leasing
1,107
883
869
1,052
Total automotive revenues
9,642
18,515
20,821
27,236
Energy generation and storage
Services and other
1.116
1.555
1,531
1.994
1,001
1,391
2,226
2,306
Total revenues
11,759
21,461
24,578
31,536
Cost of revenues
Automotive sales
6,725
13,686
15,939
19,696
Automotive leasing
708
488
459
563
Total automotive cost of revenues
7,433
14,174
16,398
20,259
Energy generation and storage
875
1,365
1,341
1,976
Services and other
1,229
1,880
2,770
2,671
Total cost of revenues
9,537
17,419
20,509
24,906
Gross profit
Operating expenses
2,222
4,042
4,069
6,630
Research and development
1,378
1,460
1,343
1,491
Selling, general and administrative
Restructuring and other
Total operating expenses
Income (loss) from operations
Interest income
Interest expense
2.477
2,835
2,646
3,145
135
149
3,855
(1,633)
4,430
4.138
4,636
(388)
(69)
1,994
20
24
44
30
(471)
(663)
(685)
(748)
Other (expense) income, net
Income (loss) before income taxes
(125)
22
45
(122)
(2,209)
(1,005)
(665)
1,154
Provision for income taxes
Net income (loss)
Net income (loss) attributable to noncontrolling interests and
redeemable noncontrolling interests in subsidiaries
32
58
110
292
(2,241)
(1,063)
(775)
862
(279)
(87)
(976)
87
141
Net income (loss) attributable to common stockholders
(1,962)
(862)
721
Less: Buy-out of noncontrolling interest
Net income (loss) used in computing net
income (loss) per share of common stock
8.
31
(1,962)
(976)
(870)
690
Net income (loss) per share of common stock attributable
to common stockholders
Basic
(11.83)
(5.72)
(0.98)
0.74
Diluted
(11.83)
(5.72)
(0.98)
0.64
Weighted average shares used in computing net
income (loss) per share of common stock
Basic
166
171
887
933
Diluted
166
171
887
1,083
- --T

Appendix (2)
Tesla, Inc.
Consolidated Balance Sheets
(in millions of $, except per share data)
December 31, December 31, December 31, December 31,
2017
2018
2019
2020
Assets
Current assets
Cash and cash equivlents
3,368
3,686
6,268
19.384
Restricted cash
155
193
Accounts receivable, net
515
949
1,324
1,886
Inventory
2,264
1,113
3,552
4,101
Prepaid expenses and other current assets
268
366
950
1,346
Total current assets
6,570
8.307
12,103
26.717
Operating lnase vehicles net
4,117
2.000
3,001
2,447
Solar energy systems, leased and to be leased, net
6.347
6.271
8,138
5,979
Property, plant and equipment, net
10.028
11.330
10,396
12,747
Operating lease right-of-use assets
ntangible assets, net
1,218
1558
362
282
339
313
Goodwil
60
68
198
207
MyPower customer notes receivable, net of current portion
457
422
Restricted cash, net of current portion
442
398
Other assets
273
572
1,470
1.636
Total assets
28,656
29,740
34,309
52,148
Liabilities
Current labilites
Accounts payable
2.390
3.404
3,771
6,061
Accrued liabilities and other
1,732
2.094
3,222
3,866
Deferred revenue
1,015
630
1,163
1,458
Resale value guarantees
787
503
Customer deposts
854
793
726
752
Curent portion of long-term debt and capital leases
797
2.568
1,786
2,132
Cument potion of promissory notes issued to related parties
100
Total current liabilities
7,675
9.992
10,667
14,248
Long-term debt and capital leases, net ot cuttert portion
9,418
9.404
11,634
9.566
Delerred vere, net of cument portion
1.178
901
1,207
1,284
Resale value guarantees, net of current portion
2.309
329
Other long-tem labilities
2.443
2.710
2.601
3,330
Total liabilities
Commitments and contingencies
23.023
21426
20,199
28,418
15
Redeomable noncontroling interests in sutsidiaries
398
565
843
604
Conventble senior notes
51
Equity
Stockholders' equity
Preferred stock; $0.001 par value, 100 shares authorized;
no shares issued and outstanding
Common stock; $0.001 par value; 2.000 shares auhorited
960, 905, 173 and 160 shares issued and outstanding as of
December 31, 2020, 2019, 2018 and 2017, respectively
Additional paidin capital
9,178
10.250
12,737
27.201
Accumulated other comprehensive loss) income
33
(8)
(36)
363
Accumulated detice
(4,974)
(5.318)
(6,083)
(5,399)
Total stockholdens equity
4,237
4,924
6,618
22,225
Nancontraling interests in subsidaries
998
834
B49
Total liabilities and equity
28.656
29,740
34.309
52.148

Accepted Answer

Ratios
In the Financial Accounting there is available of may ratio which are used to measure the…