Tesla Inc. (NASDAQ:TSLA)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes exhibited a significant upward trend from 2020 through 2022, increasing from $2,291 million to $14,874 million, representing substantial growth. However, this upward trajectory reversed in the subsequent years, with NOPAT declining to $11,309 million in 2023 and further decreasing to $8,828 million in 2024. This suggests a slowdown in operating profitability after peaking in 2022.

Cost of Capital

The cost of capital remained relatively stable over the five-year period, fluctuating narrowly between 26.85% and 27.56%. This stability indicates that the company’s cost to finance its investments did not materially change, despite fluctuations in its operational performance and investment base.

Invested Capital

Invested capital showed a consistent and substantial increase each year, growing from $39,217 million in 2020 to $67,545 million by 2024. This indicates significant ongoing investment or capital deployment, with the invested capital increasing by over 70% during this period.

Economic Profit

The economic profit metric, which considers the cost of capital, was negative in four out of five years. Starting with a large negative value of -$8,239 million in 2020, it improved to -$3,870 million in 2021 and turned positive at $1,201 million in 2022, coinciding with the peak in NOPAT. However, economic profit deteriorated again in 2023 and 2024 with values of -$5,003 million and -$9,787 million respectively, indicating that the returns generated were insufficient to cover the cost of capital in those years. This pattern suggests challenges in generating value-added returns despite the increased invested capital.

The financial data reveals notable fluctuations in key profitability metrics over the five-year period.

Net Income Attributable to Common Stockholders

Net income shows an overall increasing trend from 2020 to 2023, rising from $721 million in 2020 to a peak of $14,997 million in 2023. This represents a substantial growth in profitability over the first four years. However, in 2024, net income experiences a significant decline to $7,091 million, falling to less than half of the previous year's figure. This sudden drop interrupts the prior growth trajectory and suggests potential challenges or changes affecting net profitability in the most recent year.

Net Operating Profit After Taxes (NOPAT)

NOPAT follows a broadly upward movement from 2020 through 2022, increasing from $2,291 million to $14,874 million. This rapid growth underscores enhanced operating efficiency or higher operational earnings during this phase. Contrary to net income, NOPAT declines more moderately in 2023 and 2024, decreasing to $11,309 million and then to $8,828 million respectively. Despite the decline after 2022, NOPAT remains significantly above the 2020 base level over the entire period, indicating sustained operational profitability.

Comparatively, net income's volatility is more pronounced than that of NOPAT, especially in the latest year where net income dropped sharply relative to NOPAT. This could point to increased non-operating expenses, tax effects, or other one-time items impacting net income beyond operational performance. Overall, the company exhibited strong growth in profitability metrics until 2022, followed by a period of contraction in both net income and NOPAT through 2024.

Provision for (benefit from) income taxes

There is a notable increase in the provision for income taxes from 292 million US dollars in 2020 to 1,132 million US dollars in 2022, indicating a rising tax expense over this period. However, in 2023, the provision shifts dramatically to a benefit of -5,001 million US dollars, representing a significant tax benefit or reversal. In 2024, the provision returns to a positive amount of 1,837 million US dollars, suggesting a reinstatement of tax expenses though at a higher level than in previous years except for 2023.

Cash operating taxes

Cash operating taxes demonstrate a consistent upward trend from 422 million US dollars in 2020 to 1,335 million US dollars in 2022. However, in 2023 and 2024, cash taxes slightly decrease to 1,208 million and 1,164 million US dollars respectively. Despite this slight decline, the cash tax payments remain significantly higher than the 2020 level.

Overall Analysis

The data shows a divergence between the provision for income taxes and the cash operating taxes particularly in 2023, where the provision indicates a substantial tax benefit while cash taxes remain relatively stable and elevated. This pattern may suggest the influence of deferred tax accounting, tax credits, or other temporary differences affecting book income tax expense but not cash payments in that year. The fluctuations in the provision for income taxes reflect variability likely driven by changes in profitability, tax planning strategies, or legislative impacts. Meanwhile, cash taxes show a more stable yet gradually increasing pattern over the observed period.

Total Reported Debt & Leases

The total reported debt and leases exhibit a declining trend from 2020 through 2022, decreasing substantially from 13,228 million US dollars in 2020 to 5,748 million US dollars in 2022. However, this decreasing pattern reverses starting in 2023, where debt rises sharply to 9,573 million US dollars, followed by a further increase to 13,623 million US dollars in 2024, nearly returning to the 2020 level.

Stockholders’ Equity

Stockholders’ equity shows a consistent and strong growth trajectory over the five-year period. Starting at 22,225 million US dollars at the end of 2020, equity increases each year, reaching 72,913 million US dollars by the end of 2024. This steady rise reflects an accumulation of retained earnings and potentially increased capital contributions.

Invested Capital

Invested capital also demonstrates a continuous upward trend from 39,217 million US dollars in 2020 to 67,545 million US dollars in 2024. The increase is gradual with moderate growth between 2020 and 2021, followed by more pronounced growth in the subsequent years. This pattern suggests ongoing investments in the company’s operations and assets.

Summary of Trends

Over the period analyzed, there is evidence of a strategic shift in the company's financial structure. Initially, debt levels are reduced significantly until 2022, indicating efforts to deleverage the balance sheet. However, from 2023 to 2024, debt increases substantially, possibly to finance expansion or capital expenditures as reflected in the rising invested capital. Concurrently, stockholders' equity consistently grows, highlighting strong equity financing or retained earnings accumulation, enhancing the company's capital base. The simultaneous increase in invested capital and equity suggests robust reinvestment and capital strengthening, while the fluctuation in debt indicates a dynamic approach to leveraging.

Economic Profit

The economic profit showed considerable fluctuations during the five-year period. Beginning with a significant negative value of -8,239 million US dollars at the end of 2020, it improved substantially in 2021, nearly halving the loss to -3,870 million US dollars. In 2022, the company moved into positive territory with an economic profit of 1,201 million US dollars, indicating a period of economic value creation. However, this improvement was short-lived, as economic profit declined sharply to -5,003 million US dollars in 2023 and further deteriorated to -9,787 million US dollars by the end of 2024, the worst in the observed timeframe.

Invested Capital

Invested capital showed a consistent upward trend throughout the period. Starting from 39,217 million US dollars at the end of 2020, it increased steadily year over year, reaching 67,545 million US dollars by the end of 2024. This growth indicates ongoing investment in assets or projects, reflecting expansion or increased resource commitment.

Economic Spread Ratio

The economic spread ratio mirrored the trend in economic profit but remained negative for all years except 2022. It significantly improved from -21.01% in 2020 to -9.62% in 2021, turning positive at 2.42% in 2022, which corroborates the positive economic profit for that year. In the subsequent years, the ratio deteriorated again, falling to -8.41% in 2023 and further to -14.49% in 2024. This ratio’s fluctuation highlights challenges in generating returns above the cost of capital in most years, despite the temporary positive performance in 2022.

Summary Insights

Overall, the data reflect a volatile economic performance. While invested capital shows strong and steady growth, economic profitability has been inconsistent, with only a brief period of economic gain in 2022. The recurring negative economic profit and spread in the latest years suggest potential issues with return on investment or rising costs related to the expanded capital base. Continuous monitoring and assessment of capital allocation efficiency would be advisable to enhance long-term value creation.

The financial data reveals several notable trends across the reported periods. Adjusted revenues have shown a steady and significant upward trajectory from 31,908 million US dollars at the end of 2020 to 98,060 million US dollars by the end of 2024. This indicates a strong revenue growth during the timeframe.

In contrast, the economic profit figures display considerable volatility and, overall, negative performance in most years. Starting from a substantial loss of 8,239 million US dollars in 2020, the economic profit improves markedly to a positive 1,201 million US dollars in 2022. However, this positive result is not sustained, as the economic profit declines sharply to -5,003 million US dollars in 2023 and further to -9,787 million US dollars in 2024.

Examining the economic profit margin, a similar pattern of fluctuation is evident. The margin improves significantly from -25.82% in 2020 to -7.09% in 2021, eventually reaching a positive margin of 1.46% in 2022. Despite this improvement, the margin deteriorates once more, dropping to -5.09% in 2023 and further to -9.98% in 2024.

Overall, the data portrays strong and consistent revenue growth; however, the economic profit and its margin exhibit instability, peaking positively only in 2022 before declining substantially in the subsequent years. This suggests challenges in converting revenue growth into sustained economic profitability during the latter part of the period under review.