Tesla Inc (TSLA)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 2.02 | 1.73 | 1.53 | 1.38 | 1.88 |
| Quick ratio | 1.42 | 1.13 | 0.94 | 1.00 | 1.49 |
| Cash ratio | 1.27 | 1.01 | 0.83 | 0.90 | 1.36 |
Tesla Inc's liquidity ratios have shown some fluctuations over the years.
1. Current Ratio:
- The current ratio measures Tesla's ability to cover its short-term obligations with its current assets.
- In 2020, the current ratio was 1.88, indicating that Tesla had $1.88 in current assets for every $1 in current liabilities.
- The ratio declined to 1.38 in 2021 but improved in the following years, reaching 2.02 by the end of 2024.
- Overall, the current ratio shows that Tesla's liquidity position strengthened over the period under consideration.
2. Quick Ratio:
- The quick ratio is a more stringent measure of liquidity as it excludes inventory from current assets.
- In 2020, Tesla had a quick ratio of 1.49, which decreased to 1.00 in 2021, before gradually improving to 1.42 in 2024.
- The quick ratio indicates Tesla's ability to meet short-term obligations without relying on inventory sales, showing a positive trend over the years.
3. Cash Ratio:
- The cash ratio indicates how well Tesla can cover its current liabilities with its cash and cash equivalents.
- Tesla's cash ratio decreased from 1.36 in 2020 to 0.90 in 2021, but then improved to 1.27 by the end of 2024.
- This suggests that Tesla had a higher proportion of cash on hand relative to its current liabilities in the later years, enhancing its liquidity position.
In conclusion, Tesla's liquidity ratios display a mixed trend over the years, with improvements in the current and quick ratios indicating better liquidity management. However, the decline in the quick ratio in 2021 warrants further monitoring to ensure efficient management of short-term obligations.
See also:
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 14.43 | 9.52 | -1.29 | -25.69 | -6.64 |
The cash conversion cycle of Tesla Inc has shown fluctuations over the years based on the provided data.
In December 2020, the company had a negative cash conversion cycle of -6.64 days, indicating that it was able to convert its inventory into cash quickly, receive payments from customers promptly, and pay its suppliers at a slower rate.
By December 2021, the cash conversion cycle further decreased to -25.69 days, showing an improvement in efficiency in managing its working capital.
In December 2022, the cash conversion cycle improved to -1.29 days, before turning positive in December 2023 with a cycle of 9.52 days. This change suggests that the company took longer to convert inventory into cash or to collect payments, impacting its cash flow.
Lastly, by December 2024, the cash conversion cycle increased to 14.43 days, indicating the company's working capital management may have faced challenges or delays in converting resources into cash.
Overall, over the years, Tesla Inc has experienced fluctuations in its cash conversion cycle, with variations in efficiency in managing its working capital and cash flow.