Tesla Inc (TSLA)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.70 | 1.84 | 2.06 | 2.35 | 5.18 |
The solvency ratios of Tesla Inc indicate the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has shown a decreasing trend, from 0.39 in 2019 to 0.05 in 2023, suggesting a significant improvement in the company's ability to cover its debt with its assets. Similarly, the debt-to-capital and debt-to-equity ratios have also decreased over the years, indicating a reduction in financial risk and reliance on debt.
The financial leverage ratio, which measures the extent to which the company uses debt to finance its operations, has also exhibited a decreasing trend from 5.18 in 2019 to 1.70 in 2023. This signifies a decrease in the relative contribution of debt to the company's overall financing, indicating improved financial stability and a lower risk of insolvency.
Overall, the solvency ratios reflect a positive trend, indicating improved financial health and a stronger ability to meet long-term obligations for Tesla Inc.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 65.08 | 72.66 | 17.76 | 2.35 | -0.10 |
The interest coverage ratio measures a company's ability to cover its interest expenses with its earnings. A higher ratio indicates a better ability to meet interest obligations.
Looking at Tesla Inc's interest coverage over the past five years, we see a significant improvement in the ratio. In 2019, the interest coverage was a mere 0.12, indicating a very low ability to cover interest expenses with earnings. However, in the subsequent years, there was a notable positive trend. By 2021, the interest coverage had increased substantially to 15.97, reflecting a much-improved capacity to service its interest payments. This upward trend suggests that Tesla's earnings are increasingly able to cover its interest expenses, which could signify a lower risk of financial distress due to interest payment obligations. However, it's important to note that the data for 2023 and 2022 is not available, which limits the ability to assess the current trend in interest coverage. Nonetheless, the notable improvement between 2019 and 2021 indicates a positive development in the company's ability to handle its interest obligations.