Stock Analysis on Net
Stock Analysis on Net
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Tesla Inc. (NASDAQ:TSLA)

Analysis of Operating Leases

Advanced level

An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.


Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)

Tesla Inc., future operating lease payments (before adoption of FASB Topic 842)

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Total undiscounted future operating lease payments 1,628  1,317  926  571 
Discount rate1 4.24% 4.21% 2.91% 3.51%
 
Total present value of future operating lease payments 1,377  1,115  825  497 

Based on: 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-24).

1 Weighted-average discount rate, finance leases

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 4.24%
2019 276  2019 276  264 
2020 257  2020 257  236 
2021 230  2021 230  203 
2022 183  2022 183  155 
2023 158  2023 158  128 
2024 and thereafter 525  2024 158  123 
2025 158  118 
2026 158  113 
2027 52  36 
Total: 1,628  1,628  1,377 

Based on: 10-K (filing date: 2019-02-19).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 4.21%
2018 225  2018 225  216 
2019 204  2019 204  188 
2020 176  2020 176  155 
2021 157  2021 157  133 
2022 131  2022 131  106 
2023 and thereafter 425  2023 131  102 
2024 131  98 
2025 131  94 
2026 33  23 
Total: 1,317  1,317  1,115 

Based on: 10-K (filing date: 2018-02-23).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 2.91%
2017 165  2017 165  161 
2018 151  2018 151  143 
2019 125  2019 125  115 
2020 103  2020 103  92 
2021 89  2021 89  77 
2022 and thereafter 293  2022 89  75 
2023 89  73 
2024 89  71 
2025 26  20 
Total: 926  926  825 

Based on: 10-K (filing date: 2017-03-01).

Year Future operating lease payments (as reported) Year Future operating lease payments (estimated) Present value at 3.51%
2016 89  2016 89  86 
2017 87  2017 87  81 
2018 79  2018 79  71 
2019 69  2019 69  60 
2020 and thereafter 248  2020 69  58 
2021 69  56 
2022 69  54 
2023 41  31 
Total: 571  571  497 

Based on: 10-K (filing date: 2016-02-24).


Adjustments to Financial Statements for Operating Leases

Tesla Inc., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Adjustment to Total Assets
Total assets (as reported) 34,309  29,740  28,655  22,664  8,092 
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1 —  1,377  1,115  825  497 
Total assets (adjusted) 34,309  31,116  29,770  23,489  8,589 
Adjustment to Total Debt
Total debt (as reported) 13,419  11,971  10,315  7,120  2,674 
Add: Operating lease liability (before adoption of FASB Topic 842)2 —  1,377  1,115  825  497 
Add: Operating lease right-of-use liabilities, current portion 228  —  —  —  — 
Add: Operating lease right-of-use liabilities, net of current portion 956  —  —  —  — 
Total debt (adjusted) 14,603  13,348  11,430  7,945  3,170 

Based on: 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-24).

1, 2 Equal to total present value of future operating lease payments.


Tesla Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios for Operating Leases (Summary)

Tesla Inc., adjusted financial ratios

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Total Asset Turnover1
Reported total asset turnover 0.72 0.72 0.41 0.31 0.50
Adjusted total asset turnover 0.72 0.69 0.39 0.30 0.47
Debt to Equity2
Reported debt to equity 2.03 2.43 2.43 1.50 2.46
Adjusted debt to equity 2.21 2.71 2.70 1.67 2.91
Return on Assets3 (ROA)
Reported ROA -2.51% -3.28% -6.84% -2.98% -10.98%
Adjusted ROA -2.51% -3.14% -6.59% -2.87% -10.35%

Based on: 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-24).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Tesla Inc.’s adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted debt to equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Tesla Inc.’s adjusted debt to equity ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Tesla Inc.’s adjusted ROA improved from 2017 to 2018 and from 2018 to 2019.

Tesla Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Revenues 24,578  21,461  11,759  7,000  4,046 
Total assets 34,309  29,740  28,655  22,664  8,092 
Activity Ratio
Total asset turnover1 0.72 0.72 0.41 0.31 0.50
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Revenues 24,578  21,461  11,759  7,000  4,046 
Adjusted total assets 34,309  31,116  29,770  23,489  8,589 
Activity Ratio
Adjusted total asset turnover2 0.72 0.69 0.39 0.30 0.47

Based on: 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-24).

2019 Calculations

1 Total asset turnover = Revenues ÷ Total assets
= 24,578 ÷ 34,309 = 0.72

2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 24,578 ÷ 34,309 = 0.72

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Tesla Inc.’s adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Debt to Equity

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Total debt 13,419  11,971  10,315  7,120  2,674 
Stockholders’ equity 6,618  4,923  4,237  4,753  1,089 
Solvency Ratio
Debt to equity1 2.03 2.43 2.43 1.50 2.46
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt 14,603  13,348  11,430  7,945  3,170 
Stockholders’ equity 6,618  4,923  4,237  4,753  1,089 
Solvency Ratio
Adjusted debt to equity2 2.21 2.71 2.70 1.67 2.91

Based on: 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-24).

2019 Calculations

1 Debt to equity = Total debt ÷ Stockholders’ equity
= 13,419 ÷ 6,618 = 2.03

2 Adjusted debt to equity = Adjusted total debt ÷ Stockholders’ equity
= 14,603 ÷ 6,618 = 2.21

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Tesla Inc.’s adjusted debt-to-equity ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net loss attributable to common stockholders (862) (976) (1,961) (675) (889)
Total assets 34,309  29,740  28,655  22,664  8,092 
Profitability Ratio
ROA1 -2.51% -3.28% -6.84% -2.98% -10.98%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net loss attributable to common stockholders (862) (976) (1,961) (675) (889)
Adjusted total assets 34,309  31,116  29,770  23,489  8,589 
Profitability Ratio
Adjusted ROA2 -2.51% -3.14% -6.59% -2.87% -10.35%

Based on: 10-K (filing date: 2020-02-13), 10-K (filing date: 2019-02-19), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-02-24).

2019 Calculations

1 ROA = 100 × Net loss attributable to common stockholders ÷ Total assets
= 100 × -862 ÷ 34,309 = -2.51%

2 Adjusted ROA = 100 × Net loss attributable to common stockholders ÷ Adjusted total assets
= 100 × -862 ÷ 34,309 = -2.51%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Tesla Inc.’s adjusted ROA improved from 2017 to 2018 and from 2018 to 2019.