Tesla Inc (TSLA)

Short-term

Turnover ratios

Based on the activity ratios provided for Tesla Inc, we can analyze the efficiency of the company in managing its inventory, receivables, payables, and working capital.

1. Inventory Turnover:
- The inventory turnover ratio measures how effectively a company manages its inventory by showing how many times it sells and replaces its inventory during a period.
- Tesla's inventory turnover has been relatively consistent over the years, ranging from 4.72 to 6.99. A higher ratio indicates that Tesla efficiently sells its products, replenishes inventory, and minimizes holding costs.
- The increasing trend from 2022 to 2024 suggests that Tesla has been improving its inventory management efficiency.

2. Receivables Turnover:
- The receivables turnover ratio indicates how efficiently a company collects payment from its customers on credit sales.
- Tesla's receivables turnover has been consistently high, ranging from 22.11 to 27.97. A higher ratio reflects that Tesla has been effectively collecting payments from its customers.
- The stable trend over the years implies that Tesla has been consistent in managing its accounts receivable effectively.

3. Payables Turnover:
- The payables turnover ratio measures how quickly a company pays its suppliers for goods or services.
- Tesla's payables turnover has shown some fluctuations, ranging from 3.97 to 6.43. A higher ratio suggests that Tesla is paying its suppliers more promptly.
- The increasing trend from 2022 to 2024 indicates that Tesla has been improving its payment efficiency and maintaining good relationships with its suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio indicates how well a company utilizes its working capital to generate sales revenue.
- Tesla's working capital turnover has varied over the years, ranging from 2.53 to 7.28. A higher ratio implies that Tesla efficiently uses its working capital to support sales growth.
- The fluctuating trend suggests that Tesla's working capital management may have been affected by variations in business operations or investments.

In conclusion, based on the activity ratios provided, Tesla Inc has demonstrated efficiency in managing its inventory, receivables, and payables, while its working capital turnover has shown some fluctuations. Overall, these ratios provide valuable insights into the operational efficiency and financial health of Tesla Inc.

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Average number of days

The activity ratios of Tesla Inc provide insight into how efficiently the company manages its inventory, collects its receivables, and pays its liabilities.

1. Days of Inventory on Hand (DOH)
- The DOH ratio measures how many days worth of inventory a company holds before it is sold.
- Tesla's DOH decreased from 60.10 days in 2020 to 52.25 days in 2021, indicating an improvement in inventory management efficiency.
- However, there was a subsequent increase to 77.32 days in 2022, and then a decrease to 62.87 days in 2023 followed by another decrease to 54.66 days in 2024.
- Overall, Tesla seems to have made efforts in optimizing its inventory levels over the years.

2. Days of Sales Outstanding (DSO)
- The DSO ratio reflects the average number of days it takes for the company to collect payment after a sale.
- Tesla's DSO decreased from 21.93 days in 2020 to 13.05 days in 2021, suggesting a more efficient collection of receivables.
- The DSO remained relatively stable from 2021 to 2024, indicating that Tesla has been successful in managing its accounts receivable effectively.

3. Number of Days of Payables
- This ratio shows the average number of days a company takes to pay its suppliers.
- Tesla's days of payables increased slightly from 88.68 days in 2020 to 90.98 days in 2021 and further to 91.87 days in 2022.
- There was a significant reduction to 66.58 days in 2023 and another decrease to 56.74 days in 2024, indicating that Tesla has been managing its payables more efficiently.

In summary, Tesla Inc has shown improvements in inventory turnover, accounts receivable collection, and payable management over the years, reflecting positive trends in the company's operational efficiency and liquidity management.

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See also:

Tesla Inc Short-term (Operating) Activity Ratios

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Long-term

Based on the provided data for Tesla Inc, we can analyze the long-term activity ratios as follows:

1. Fixed Asset Turnover:
- The fixed asset turnover ratio indicates how efficiently a company utilizes its fixed assets to generate sales.
- In December 2020, the fixed asset turnover ratio was 2.47, meaning that for every dollar in fixed assets, Tesla generated $2.47 in sales.
- The ratio improved consistently over the years, reaching 3.46 in December 2022, showcasing better utilization of fixed assets for revenue generation.
- However, there was a slight decrease to 3.26 in December 2023 and a further decline to 2.73 in December 2024, indicating a potential decrease in efficiency in utilizing fixed assets for sales in those years.

2. Total Asset Turnover:
- The total asset turnover ratio measures how effectively a company utilizes its total assets to generate revenue.
- Tesla's total asset turnover ratio increased from 0.60 in December 2020 to 0.99 in December 2022, showing an improvement in efficiency in generating revenue from total assets.
- Subsequently, the ratio declined to 0.91 in December 2023 and further to 0.80 in December 2024, suggesting a decrease in the effectiveness of utilizing total assets to generate sales in those periods.

Overall, the trend indicates that Tesla initially improved its efficiency in utilizing both fixed and total assets to generate revenue, but experienced some declines in efficiency in the later years. This analysis provides insights into the company's operational performance and asset utilization over the long term.

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See also:

Tesla Inc Long-term (Investment) Activity Ratios