Tesla Inc (TSLA)
Liquidity ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.73 | 1.69 | 1.59 | 1.57 | 1.53 | 1.46 | 1.43 | 1.35 | 1.38 | 1.39 | 1.51 | 1.66 | 1.88 | 1.63 | 1.25 | 1.24 | 1.13 | 1.08 | 1.06 | 0.83 |
| Quick ratio | 1.13 | 1.07 | 0.96 | 0.93 | 0.94 | 0.95 | 0.96 | 0.95 | 1.00 | 1.00 | 1.12 | 1.28 | 1.49 | 1.23 | 0.82 | 0.78 | 0.71 | 0.64 | 0.64 | 0.35 |
| Cash ratio | 1.01 | 0.98 | 0.84 | 0.82 | 0.83 | 0.86 | 0.87 | 0.84 | 0.90 | 0.89 | 0.99 | 1.15 | 1.36 | 1.09 | 0.70 | 0.67 | 0.59 | 0.53 | 0.52 | 0.24 |
The liquidity ratios of Tesla Inc, including the current ratio, quick ratio, and cash ratio, provide insights into the company's ability to meet its short-term obligations and the adequacy of its liquid assets.
The current ratio, which measures the company's ability to pay short-term liabilities with its current assets, has gradually increased from 1.35 in March 2022 to 1.73 in December 2023. This indicates an improvement in the company's short-term liquidity position.
The quick ratio, which excludes inventory from current assets in the calculation, also shows an increasing trend from 1.04 in March 2022 to 1.25 in December 2023. This suggests that the company has a stronger ability to meet its short-term obligations using its most liquid assets.
Furthermore, the cash ratio, which measures the company's ability to cover short-term liabilities with its cash and cash equivalents, has shown a similar increasing trend from 0.93 in March 2022 to 1.13 in December 2023, indicating a strengthened ability to meet short-term obligations using only cash assets.
Overall, the improving liquidity ratios of Tesla Inc over the analyzed period signal its enhanced ability to cover its short-term liabilities and suggests a positive liquidity position for the company.
See also:
Tesla Inc Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 9.52 | 8.59 | 8.85 | 4.28 | -1.29 | -13.00 | -11.79 | -22.44 | -25.69 | -15.64 | -12.94 | -13.12 | -6.64 | 10.72 | 27.95 | 26.98 | 15.76 | 18.89 | 21.22 | 28.55 |
The cash conversion cycle (CCC) measures the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales. A shorter CCC indicates that the company is able to efficiently collect cash from its sales and minimize the time it takes to convert its investments into cash.
Looking at Tesla Inc's CCC over the past eight quarters, we can observe significant fluctuations. In the first two quarters of 2022, the company had negative CCC, indicating a swift conversion of investments into cash, potentially reflecting efficient inventory management or rapid collection of receivables. However, this trend reversed in subsequent quarters, with the CCC turning positive and increasing notably by the end of 2023.
From a financial analysis perspective, the positive CCC suggests that Tesla Inc may be taking longer to realize cash from its sales or facing challenges in managing its working capital. It is important for investors and stakeholders to closely monitor the trend of the CCC, as it can provide insights into the company's operational efficiency and financial health. If the trend continues, it may be indicative of potential inefficiencies in inventory management, lengthening collection periods, or other factors impacting the company's cash conversion cycle.