Moreover, Tesla should be part of a broader portfolio. The low beta for Tesla basically means that its movements are not all that well-correlated with the broad market. Only the aggressive excess cash generation is offsetting this destruction of capital but not for long.
This solution is running out of gas rapidly and no gas stations in sight. Financial Ratios A good way to investigate the health of a company is via its financial ratios. All publicly-traded companies need to publish financial statements according to a consistent reporting format, and using generally accepted accounting principles GAAP.
Excess Cash Cash is not a great determinant here for survivability compared to excess cash generation. Opinions among the analyst community are decidedly mixed about Tesla stock.
The basic categories of financial ratios are the liquidity ratios, solvency ratios, efficiency ratios, market ratios and the profitability ratios Loth, There are ways around this, but the company has not yet figured out how or has decided not to address the issue, dangerous at best.
The market risk is a beta of 1. For example, someone who is in their thirties and just starting a family is going to be motivated by a time horizon that begins with buying a home short-term or medium-term to longer-term objectives such as college and retirement.
This actually makes the stock useful in a portfolio as a means of countering other stocks that move more in line with the broad market. Thus, the time horizon for Tesla shares is much longer than the beta would indicate, but financial analysis bears this out.
The company does not at present have a demand problem, but rather a supply problem It cannot built capacity fast enough, but is determined to keep production in-house.
But how are their finances? In general, equity investments are riskier than debt investments, among the common classes. In the last four years, the first three were completely unsustainable.
By you could buy a Tesla car for the cost of production with little or no mark-up on the costs to produce! This is creating a cash flow problem for the company as it is not making enough money to fuel its expansion. Age matters where it affects the time horizon of the investments.
The current ratios for the past three years for Tesla are: Many bearish analysts evaluate Tesla strictly against other car companies, where bullish analysts tend to accept the proposition that Tesla is in a completely different situation from most of those, and that the operational differences between Tesla and other automakers makes comparability absurd -- not the least of which is that most automakers are mature, slow-growing entities while Tesla is not.
More importantly, the cash flow before financing is beginning to run into the red with no end in sight. But for this debate, my customers want to talk about the stock, and that is why it makes for such an interesting case study.
Investor Profile Not all investments are suitable for all investors. Thus, most companies see the value of their shares fall when the market falls, though there are always exceptions. The only sort of investor who should be interested in Tesla right now is someone with a high risk tolerance and a very long time horizon -- the company could just as well be the next Blackberry as the next Apple.
Working Capital Needs The improving efficiency of working capital needs is being overwhelmed by the operating income losses that are starting to accelerate further.
The most significant were gender, marital status, occupational status, income, race and education. Sustainable Revenue Growth When looking at real revenue growth we want to know if it is sustainable.Tesla Motors, Inc. was founded in early by a group of Silicon Valley engineers, incorporated in Delaware on July 1 of the same year, and is now headquartered in Palo Alto, California (“Tesla- Investor”).
Tesla Motors Financial Analysis Tesla Motors, the brainchild of the PayPal co-founder Elon Musk, has been in the news recently with their award-winning Tesla Model S, a sedan capable of beating out a Viper R/T in a drag race.
Sep 09, · Annual Financials for Tesla Inc. View Ratios. Elon Musk’s high and Tesla’s low: Stock and bonds tumble on CEO’s latest shenanigans Intraday Data provided by SIX Financial Information. Financial Analysis of Tesla Motors Table of Contents Overview.
3 Analysis of Tesla Motors Financial Performance. 4 Liquidity: Current Ratio. Introduction.
In this paper I intend to provide a sound financial analysis of Tesla Motors Incorporated. I will do so by calculating and providing liquidity, profitability, and solvency ratios and then evaluating those results.
View this research paper on Financial Analysis of Tesla Motors. The company that I have selected to study is Tesla Motors The reason for studying this company.Download