Stock Analysis on Net

Tesla Inc. (NASDAQ:TSLA)

Financial Reporting Quality: Aggregate Accruals 

Microsoft Excel

Earnings can be decomposed into cash and accrual components. The accrual component (aggregate accruals) has been found to have less persistence than the cash component, and therefore (1) earnings with higher accrual component are less persistent than earnings with smaller accrual component, all else equal; and (2) the cash component of earnings should receive a higher weighting evaluating company performance.


Balance-Sheet-Based Accruals Ratio

Tesla Inc., balance sheet computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Operating Assets
Total assets 62,131 52,148 34,309 29,740 28,655
Less: Cash and cash equivalents 17,576 19,384 6,268 3,686 3,368
Less: Short-term marketable securities 131
Operating assets 44,424 32,764 28,041 26,054 25,287
Operating Liabilities
Total liabilities 30,548 28,418 26,199 23,426 23,023
Less: Current portion of debt and finance leases 1,589 2,132 1,785 2,568 797
Less: Current portion of solar bonds and promissory notes issued to related parties 100
Less: Debt and finance leases, net of current portion 5,245 9,556 11,634 9,404 9,418
Operating liabilities 23,714 16,730 12,780 11,455 12,708
 
Net operating assets1 20,710 16,034 15,261 14,599 12,579
Balance-sheet-based aggregate accruals2 4,676 773 662 2,020
Financial Ratio
Balance-sheet-based accruals ratio3 25.45% 4.94% 4.43% 14.86%
Benchmarks
Balance-Sheet-Based Accruals Ratio, Competitors4
Ford Motor Co. 4.34% -0.10% -1.72% 3.81%
General Motors Co. 11.54% 3.50% 4.15% 12.59%
Balance-Sheet-Based Accruals Ratio, Sector
Automobiles & Components 9.68% 2.12% 1.69% 8.86%
Balance-Sheet-Based Accruals Ratio, Industry
Consumer Discretionary 13.99% 4.88% 3.66% 4.90%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 2021 Calculation
Net operating assets = Operating assets – Operating liabilities
= 44,42423,714 = 20,710

2 2021 Calculation
Balance-sheet-based aggregate accruals = Net operating assets2021 – Net operating assets2020
= 20,71016,034 = 4,676

3 2021 Calculation
Balance-sheet-based accruals ratio = 100 × Balance-sheet-based aggregate accruals ÷ Avg. net operating assets
= 100 × 4,676 ÷ [(20,710 + 16,034) ÷ 2] = 25.45%

4 Click competitor name to see calculations.

Financial ratio Description The company
Balance-sheet-based accruals ratio Ratio is found by dividing balance-sheet-based aggregate accruals by average net operating assets. Using the balance-sheet-based accruals ratio, Tesla Inc. deteriorated earnings quality from 2020 to 2021.

Cash-Flow-Statement-Based Accruals Ratio

Tesla Inc., cash flow statement computation of aggregate accruals

US$ in millions

Microsoft Excel
Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Net income (loss) attributable to common stockholders 5,519 721 (862) (976) (1,961)
Less: Net cash provided by (used in) operating activities 11,497 5,943 2,405 2,098 (61)
Less: Net cash used in investing activities (7,868) (3,132) (1,436) (2,337) (4,419)
Cash-flow-statement-based aggregate accruals 1,890 (2,090) (1,831) (736) 2,518
Financial Ratio
Cash-flow-statement-based accruals ratio1 10.29% -13.36% -12.26% -5.42%
Benchmarks
Cash-Flow-Statement-Based Accruals Ratio, Competitors2
Ford Motor Co. -0.58% -6.92% -3.83% 4.91%
General Motors Co. 8.08% 9.03% 2.11% 12.03%
Cash-Flow-Statement-Based Accruals Ratio, Sector
Automobiles & Components 4.81% 1.05% -1.29% 7.86%
Cash-Flow-Statement-Based Accruals Ratio, Industry
Consumer Discretionary 10.85% 3.70% -2.97% -0.48%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

1 2021 Calculation
Cash-flow-statement-based accruals ratio = 100 × Cash-flow-statement-based aggregate accruals ÷ Avg. net operating assets
= 100 × 1,890 ÷ [(20,710 + 16,034) ÷ 2] = 10.29%

2 Click competitor name to see calculations.

Financial ratio Description The company
Cash-flow-statement-based accruals ratio Ratio is found by dividing cash-flow-statement-based aggregate accruals by average net operating assets. Using the cash-flow-statement-based accruals ratio, Tesla Inc. improved earnings quality from 2020 to 2021.