Review of Tesla’s Annual Report

Tesla is a company that is involved in the design, development, manufacture, and selling of high-performance fully electric vehicles, energy generation, and storage systems. The company boasts as the only vertically integrated sustainable energy company providing an end-to-end clean product related to generation, storage, and consumption. The following discussion is an analysis of Tesla’s annual report. 

The total current assets of the company increased from $ 6,259,796 thousand in 2016 to $ 6,570,520 in 2017 (Tesla, Inc., 2018). This was equivalent to a 4.96% increase between the one year. The total assets associated with Tesla Inc. in 2016 were $ 22,664,076 thousand as compared to $ 28, 655,372 of the same in 2017. This represented a growth of 26%. The total current liabilities associated with the company accumulated to $ 5,827,005 thousand in 2016 compared to $ 7,674,670 indicating an increase of 31%. The total liabilities for the company for the 2016 financial year were $ 16,750,167 thousand while in 2017 the figure rose to $23,022,980, which was equivalent to an increase of 37.44% (Tesla, Inc., 2018). The total stockholders’ equity for Tesla decreased from $4,752,911 thousands in 2016 to $ 4,237,242 in 2017. This marked a 10.85% decrease in the overall stockholder equity. 

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The company has had a positive trend in the revenue’s volumes for the last three years from a value of $4,046,025 in 2015, $7,000,132 in 2016, and $11,758,751 in 2017. This was equivalent to 73% between 2015 and 2016 financial years and a 70% between 2016 and 2017 financial year (Tesla, Inc., 2018). The company made a net loss of (thousands, $ 2240578, $ 773046, and $888663 for 2017, 2016, and 2015 financial years respectively.

While some of these changes reflect positive trends, the overall picture to an investor may be negative. This is because the figures represent a decrease in the stockholder equity. This implies that the shareholders’ wealth is not being maximized. The continued making of loss implies that the stockholder will receive no dividends. It is evident that the company has very high operating expenses thereby affecting the income levels.  From the stakeholder’s perspective using the book value method, the net worth of the company has reduced (Fernandez, 2007).

References 

Fernandez, P. (2007). Company Valuation Methods: The Most Common Errors in Valuation. IESE Business School.Tesla, Inc. (2018). Annual Report Pursuant to Section 13 or 15(d) of the Security Exchange Act of 1934; For the Financial Year Ended December 31, 2017. Washington D.C: United States Securities and Exchange Commission.

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