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Pages:
3 pages/≈825 words
Sources:
4
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 14.04
Topic:
Tesla: Financial Reports, Financial Ratios, and Financial and Economic Strategies
Essay Instructions:
Tesla
The identification portion of the project is valued at 5 percent of your final course grade, and consists of gathering financial information (financial reports, financial ratios) on the specific company and identifying the financial and economic strategies used by the company. In short, this stage would have three components:
o Financial reports of the company (including financial statements like income statement, balance sheet, and cash flow statements)
o Financial Ratios of the company
o Discussion on the financial and economic strategies used by the company (no more than two pages double-spaced)
This assignment should be submitted under the Assignments folder.
Essay Sample Content Preview:
Case Study – Stage 1 Tesla
Student Full Name
Institutional Affiliation
Course Full Title
Instructor Full Name
Due Date
Case Study – Stage 1 Tesla
This project will include financial reports, financial ratios, and the financial and economic strategies used by Tesla. These components are split into the following sections:
Financial Reports
The financial reports of Tesla include the three financial statements: income statement, balance sheet, and cash flow statements.
Income Statement
(MarketWatch, 2022)
Balance Sheet
(MarketWatch, 2022)
Cash Flow Statement
(MarketWatch, 2022)
Financial Ratios
The financial ratios of Tesla will include market value and short-term solvency ratios (price-earnings ratio, current ratio, and quick ratio), profitability and long-term solvency ratios (return on equity ratio, profit margin ratio, cash coverage ratio, and debt-to-equity ratio), along with asset management ratios (inventory turnover ratio, net working capital turnover ratio, and total assets turnover ratio).
Market Value and Short-Term Solvency Ratios
Components
12/31/2021
Price-Earnings Ratio
Price of Stock/Earnings Per Share
1,056.78/7.37 = 143.39
Current Ratio
Current Assets/Current Liabilities
27.1/19.705 = 1.38
Quick Ratio
(Current Assets Less Inventory and Prepaid Costs)/Current Liabilities
19.62/19.705= 0.996
The price-earnings ratio measures the price of a company’s stock against its earnings. Tesla’s relatively high price-earnings ratio indicates a high expectation and confidence among investors of high growth rates in the future. On the other hand, the current ratio is a measure of the financial strength of a company, particularly its liquidity (Aziz & Rahman, 2017). Tesla appears to be in a good position to pay its short-term debts using its liquid assets: a ratio above one usually indicates a company's liquidity. Conversely, the quick ratio measures a company's short-term cash flow situation. Tesla may experience a little difficulty in settling its current liabilities using its liquid assets: the company must work towards achieving a quick ratio of 1 or more.
Profitability and Long-Term Solvency Ratios
Components
12/31/2021
Return on Equity
Net Income/Average Shareholders’ Equity * 100
5.52/((31.01 + 23.07)/2) * 100 = 20%
Profit Margin
Net Income/Revenues * 100
5.52/53.8 * 100 = 10%
Cash Coverage Ratio
Total Cash and Cash Equivalents/ Total Current Liabilities
17.707/19.705 = 0.90
Debt-To-Equity Ratio
Total Debt/Shareholder Equity * 100
5.245/31.01 * 100= 17%
Return on equity measures a company's efficiency in making a profit. Tesla is currently well-placed in terms of profit generation. On the other hand, the profit margin measures how a company spends its profits. Tesla is presently using a tenth of its profits in revenue generation: this figure also indicates that the company is making go...
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