Question

In: Accounting

Financial reports are the primary means by which corporations report their performance and financial condition. Financial...

Financial reports are the primary means by which corporations report their performance and financial condition. Financial statements are one component of the annual report mailed to their shareholders and to interested others. Many companies are using the 10-K report that they file with the SEC as a replacement for the financial portion of their annual report.

Required:

Obtain the most recent annual report (or 10-K report) for the year ended 12/31/2019 (filed 2/13/20) for Tesla Inc. The easiest way is to use the EDGAR search tools on the SEC.gov website). Scroll down to the middle of the SEC home page. You will see you will see "EDGAR Search Company and Individual finding." Type Tesla's ticker symbol (TSLA) in the box to the right. You will be taken to the Tesla, Inc. filings page. Look for the most recent 10-K report. Click on the BLUE oval that reads "Interactive Data." (Make sure it is the 10-K report, not the 10-Q.)

After browsing the report, click on the yellow-orange header that reads, "Financial Statements" then "Consolidated Balance Sheets" to answer the following questions:

1. Name two Current Assets and two Long-term Assets that are listed on the Balance Sheet.

2. What is the value of the 1) Total Current Assets and 2) the Total Assets shown? (Be sure to use a dollar sign and indicate "in millions.")

2. Name two Current Liabilities and two Long-term Liabilities listed. What is the value of the 1) Total Current Liabilities and 2) Total Liabilities shown? (Be sure to use a dollar sign and indicate "in millions.")

3. Now look at the Income Statement (Statement of Operations). What are the three main sources of revenue for Tesla? What are the total revenues for 2019?  (Be sure to use a dollar sign and indicate "in millions.")

4. Continue looking on the Income Statement: What is the Gross Profit for 2019? What is amount of the Net Loss for 2019?  (Be sure to use a dollar sign and indicate "in millions.")

5. What are two factors (expenses) that may have contributed to Tesla's Net Loss for the period? Be Specific.

  • Answer questions 1-4 in complete sentences.
  • Please indicate (for each item) exactly where you found it in the annual report. (e.g., Financial Statements -> Balance Sheet -> Current Assets section.)

Solutions

Expert Solution

1. Name two Current Assets and two Long-term Assets that are listed on the Balance Sheet.

Financial Statements -> Balance Sheet -> Current Assets section

Tesla, Inc.
Consolidated balance Sheet
(In Millions, except per share data)
Particulars December 31, 2019 December 31, 2018
Assets
Current Assets
Accounts receivable, net $              1,324 $                  949
Inventory $              3,552 $               3,113

Financial Statements -> Balance Sheet -> Non Current Assets section

Tesla, Inc.
Consolidated balance Sheet
(In Millions, except per share data)
Particulars December 31, 2019 December 31, 2018
Assets
Non Current Assets
Property, plant and equipment, net $            10,396 $            11,330
Goodwill $                  198 $ 68

2. What is the value of the 1) Total Current Assets and 2) the Total Assets shown? (Be sure to use a dollar sign and indicate "in millions.")

Financial Statements -> Balance Sheet -> Current Assets section and total assets

Tesla, Inc.
Consolidated balance Sheet
(In Millions, except per share data)
Sr. No Particulars December 31, 2019 December 31, 2018
1 Total Current Assets $            12,103 $               8,307
2 Total Assets $            34,309 $            29,740

.

3. Now look at the Income Statement (Statement of Operations). What are the three main sources of revenue for Tesla? What are the total revenues for 2019?  (Be sure to use a dollar sign and indicate "in millions.")

Financial Statements -> Consolidated Statements of Operations -> Revenue

Tesla, Inc.
Consolidated Statements of Operations
(In Millions, except per share data)
Particulars December 31, 2019 December 31, 2018
Revenues
Automotive sales $            19,952 $            17,632
Energy generation and storage $              1,531 $               1,555
Services and other $              2,226 $               1,391
Total Revenue $            23,709 $            20,578

The three main sources of revenue for Tesla -

Financial Statements -> Consolidated Statements of Operations -> Revenue

Particulars
Majour Sources of Revenues
Automotive sales
Energy generation and storage
Services and other

Financial Statements -> Consolidated Statements of Operations -> Revenue

Total revenues for 2019 -

Particulars December 31, 2019
Revenues
Automotive sales $            19,952
Automotive Leasing $                  869
Energy generation and storage $              1,531
Services and other $              2,226
Total Revenue $            24,578

4. Continue looking on the Income Statement: What is the Gross Profit for 2019? What is amount of the Net Loss for 2019?  (Be sure to use a dollar sign and indicate "in millions.")

Financial Statements -> Consolidated Statements of Operations -> Gross Profit & Net Loss

Tesla, Inc.
Consolidated Statements of Operations
(In Millions, except per share data)
Particulars December 31, 2019 December 31, 2018
Gross profit $              4,069 $               4,042
Net Loss $               (775) $            (1,063)

5. What are two factors (expenses) that may have contributed to Tesla's Net Loss for the period? Be Specific.

Below two factors that may have contributed to Tesla's Net Loss -

Lower Auto Revenue - Auto Revenue is as compare to cost relared to the revenue is lower that impacted the companies profit.

Lower Other Revenue - Other revenue also i.e. revenue generated from the same is lower as compare to cost incurred to generate the same.

Tesla has 20% GP to the total sales. and cost related to the same which pertains 80% needs to slower down which will improve their profit.


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