Tesla Inc (TSLA)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Inventory turnover	5.81	4.72	6.99	6.07	5.77
Receivables turnover	27.59	27.53	27.97	16.64	18.56
Payables turnover	5.48	3.97	4.01	4.12	5.44
Working capital turnover	4.64	5.73	7.28	2.53	17.12

The activity ratios of Tesla Inc provide insight into the efficiency of the company's operations. The inventory turnover ratio has shown steady improvement over the last five years, indicating that Tesla has been more effective in managing its inventory levels. The receivables turnover ratio has also been consistent, signaling that the company is efficient in collecting outstanding receivables from its customers.

On the other hand, the payables turnover ratio has fluctuated over the years, but generally demonstrates that Tesla is effectively managing its trade credit from suppliers. The working capital turnover ratio has varied significantly, indicating changes in the company's ability to generate revenue relative to its working capital.

Overall, these activity ratios suggest that Tesla has improved its inventory management and maintained efficient collection of receivables, while also showing variability in the management of payables and working capital efficiency over the past five years.

Average number of days

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	62.87	77.32	52.25	60.10	63.22
Days of sales outstanding (DSO)	days	13.23	13.26	13.05	21.93	19.66
Number of days of payables	days	66.58	91.87	90.98	88.68	67.11

Days of inventory on hand (DOH) measures the average number of days it takes for Tesla Inc to sell its inventory. The trend indicates that the company's inventory turnover has increased over the years, suggesting better management of inventory levels.

Days of sales outstanding (DSO) represents the average number of days it takes for Tesla Inc to collect its accounts receivable. The DSO has remained relatively stable over the years, which implies consistent efficiency in collecting sales revenue from customers.

The number of days of payables indicates the average number of days Tesla Inc takes to pay its suppliers. The trend shows that the company has been extending its payables period, potentially improving cash flow by taking longer to pay its suppliers.

Overall, the activity ratios demonstrate that Tesla Inc has become more efficient in managing its inventory, maintaining stable collection of receivables, and extending its payables period to enhance cash flow.

Long-term

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Fixed asset turnover	3.26	3.46	2.85	2.47	2.36
Total asset turnover	0.91	0.99	0.87	0.60	0.72

The long-term activity ratios for Tesla Inc indicate the efficiency with which the company utilizes its assets to generate sales. The fixed asset turnover has demonstrated a general increasing trend from 2019 to 2022, indicating that the company is generating more sales from its fixed assets over time. However, in 2023, there was a slight decrease in the fixed asset turnover, which may indicate a slightly reduced efficiency in utilizing fixed assets to generate sales.

Meanwhile, the total asset turnover has also shown an overall increasing trend from 2019 to 2022, signaling that the company is generating more sales relative to its total assets. However, in 2023, there was a slight decrease in the total asset turnover, suggesting a potential decrease in the efficiency of using total assets to generate sales.

Overall, while the fixed asset turnover has been relatively strong, the slight decrease in 2023 raises some potential concerns. Similarly, the total asset turnover, despite showing improvement over the years, also experienced a decrease in 2023. These trends might prompt further analysis to understand the reasons behind these movements and whether they are indicative of potential operational challenges or simply reflective of strategic shifts in the company's asset management.