Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Tesla Inc., liquidity ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Current ratio | 2.16 | 2.02 | 1.73 | 1.53 | 1.38 | |
| Quick ratio | 1.53 | 1.42 | 1.13 | 0.94 | 1.00 | |
| Cash ratio | 1.39 | 1.27 | 1.01 | 0.83 | 0.90 |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The liquidity position of the company demonstrates a generally improving trend across the observed period. All three liquidity ratios – current, quick, and cash – exhibit increases from 2021 to 2025, suggesting a strengthening ability to meet short-term obligations. The rate of improvement varies between the ratios, indicating shifts in the composition of current assets.
- Current Ratio
- The current ratio shows a consistent upward trajectory, increasing from 1.38 in 2021 to 2.16 in 2025. This indicates a growing capacity to cover current liabilities with current assets. The increase suggests either a faster growth in current assets relative to current liabilities, or a decrease in current liabilities, or a combination of both. The rate of increase appears to accelerate from 2022 onwards.
- Quick Ratio
- The quick ratio, while also trending upward, displays a less pronounced increase than the current ratio. Starting at 1.00 in 2021, it reaches 1.53 in 2025. A slight dip is observed between 2021 and 2022, before resuming an upward trend. This suggests that changes in inventory levels are influencing the current ratio more significantly than changes in the most liquid assets. The quick ratio consistently remains above 1.0, indicating sufficient liquid assets to cover immediate liabilities.
- Cash Ratio
- The cash ratio demonstrates the most substantial relative increase among the three ratios, moving from 0.90 in 2021 to 1.39 in 2025. This signifies a growing proportion of current assets held as cash and cash equivalents. The increase suggests a more conservative approach to asset allocation or a deliberate strategy to enhance immediate solvency. The cash ratio’s improvement parallels the overall liquidity enhancement, but with a greater emphasis on the most liquid assets.
Collectively, these ratios suggest a strengthening liquidity profile. The increasing trend in all three ratios, particularly the cash ratio, indicates a growing ability to meet short-term obligations with highly liquid assets. The divergence between the current and quick ratios suggests inventory management is a factor influencing overall liquidity.
Current Ratio
Tesla Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 68,642) | 58,360) | 49,616) | 40,917) | 27,100) | |
| Current liabilities | 31,714) | 28,821) | 28,748) | 26,709) | 19,705) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 2.16 | 2.02 | 1.73 | 1.53 | 1.38 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Ford Motor Co. | — | 1.16 | 1.20 | 1.20 | 1.20 | |
| General Motors Co. | 1.17 | 1.13 | 1.08 | 1.10 | 1.10 | |
| Current Ratio, Sector | ||||||
| Automobiles & Components | — | 1.26 | 1.21 | 1.20 | 1.18 | |
| Current Ratio, Industry | ||||||
| Consumer Discretionary | — | 1.22 | 1.20 | 1.15 | 1.25 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Current ratio = Current assets ÷ Current liabilities
= 68,642 ÷ 31,714 = 2.16
2 Click competitor name to see calculations.
The current ratio demonstrates a consistent upward trend over the five-year period. This indicates improving liquidity and a strengthening short-term financial position.
- Current Ratio Trend
- The current ratio increased from 1.38 in 2021 to 2.16 in 2025. This represents a substantial improvement in the company’s ability to cover its short-term obligations with its short-term assets.
- Year-over-Year Changes
- From 2021 to 2022, the current ratio experienced a moderate increase, moving from 1.38 to 1.53. The rate of increase accelerated between 2022 and 2023, with the ratio reaching 1.73. Further gains were observed in 2023 and 2024, rising to 2.02, and continued into 2025, culminating in a ratio of 2.16.
- Underlying Components
- The increase in the current ratio is attributable to both growth in current assets and a more moderate increase in current liabilities. Current assets grew from US$27,100 million in 2021 to US$68,642 million in 2025, while current liabilities increased from US$19,705 million to US$31,714 million over the same period. The faster growth of current assets relative to current liabilities is the primary driver of the improving ratio.
The consistently rising current ratio suggests the company is effectively managing its working capital and possesses a growing cushion to meet its short-term financial commitments. The trend indicates decreasing liquidity risk over the analyzed period.
Quick Ratio
Tesla Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 16,513) | 16,139) | 16,398) | 16,253) | 17,576) | |
| Short-term investments | 27,546) | 20,424) | 12,696) | 5,932) | 131) | |
| Accounts receivable, net | 4,576) | 4,418) | 3,508) | 2,952) | 1,913) | |
| Total quick assets | 48,635) | 40,981) | 32,602) | 25,137) | 19,620) | |
| Current liabilities | 31,714) | 28,821) | 28,748) | 26,709) | 19,705) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 1.53 | 1.42 | 1.13 | 0.94 | 1.00 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Ford Motor Co. | — | 0.98 | 1.01 | 1.02 | 1.03 | |
| General Motors Co. | 0.92 | 0.90 | 0.83 | 0.86 | 0.84 | |
| Quick Ratio, Sector | ||||||
| Automobiles & Components | — | 1.00 | 0.95 | 0.94 | 0.95 | |
| Quick Ratio, Industry | ||||||
| Consumer Discretionary | — | 0.91 | 0.86 | 0.81 | 0.93 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 48,635 ÷ 31,714 = 1.53
2 Click competitor name to see calculations.
The quick ratio demonstrates a generally improving liquidity position over the observed period. Initial values indicate a ratio near parity, followed by a period of strengthening financial flexibility.
- Quick Ratio Trend
- The quick ratio began at 1.00 in 2021, decreased slightly to 0.94 in 2022, and then exhibited consistent growth through 2025. The ratio increased to 1.13 in 2023, further to 1.42 in 2024, and reached 1.53 in 2025. This indicates an increasing ability to meet short-term obligations with highly liquid assets.
- Relationship Between Quick Assets and Current Liabilities
- Total quick assets increased steadily from US$19,620 million in 2021 to US$48,635 million in 2025. Current liabilities also increased over the same period, rising from US$19,705 million to US$31,714 million. However, the growth in quick assets outpaced the growth in current liabilities, contributing to the observed improvement in the quick ratio.
The initial dip in the quick ratio in 2022 suggests a temporary strain on immediate liquidity, potentially due to timing differences between asset conversion and liability payments. However, subsequent increases demonstrate a successful strategy in bolstering liquid asset positions relative to short-term obligations. The sustained upward trend from 2023 through 2025 suggests a strengthening capacity to cover current liabilities without relying on inventory sales.
- Overall Assessment
- The quick ratio’s trajectory indicates a positive trend in short-term liquidity. The company appears to be effectively managing its current assets and liabilities, resulting in a more secure financial position as evidenced by the increasing ratio values.
Cash Ratio
Tesla Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 16,513) | 16,139) | 16,398) | 16,253) | 17,576) | |
| Short-term investments | 27,546) | 20,424) | 12,696) | 5,932) | 131) | |
| Total cash assets | 44,059) | 36,563) | 29,094) | 22,185) | 17,707) | |
| Current liabilities | 31,714) | 28,821) | 28,748) | 26,709) | 19,705) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 1.39 | 1.27 | 1.01 | 0.83 | 0.90 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Ford Motor Co. | — | 0.36 | 0.40 | 0.45 | 0.55 | |
| General Motors Co. | 0.30 | 0.28 | 0.28 | 0.34 | 0.39 | |
| Cash Ratio, Sector | ||||||
| Automobiles & Components | — | 0.44 | 0.43 | 0.45 | 0.52 | |
| Cash Ratio, Industry | ||||||
| Consumer Discretionary | — | 0.52 | 0.48 | 0.47 | 0.64 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 44,059 ÷ 31,714 = 1.39
2 Click competitor name to see calculations.
The cash ratio exhibited a generally increasing trend over the five-year period. Initial values indicate a strong, but slightly decreasing, ability to cover current liabilities with immediately available cash. Subsequent years demonstrate improvement, culminating in the highest ratio observed in the final year of the analyzed period.
- Cash Ratio Trend
- The cash ratio began at 0.90 in 2021, representing 90% of current liabilities covered by total cash assets. A slight decrease was observed in 2022, with the ratio falling to 0.83. This indicates a marginal reduction in the company’s ability to meet its short-term obligations with only cash and cash equivalents.
- However, a positive shift occurred in 2023, as the cash ratio rose to 1.01, signifying that the company held sufficient cash to fully cover its current liabilities. This upward momentum continued into 2024 and 2025, with the ratio reaching 1.27 and 1.39 respectively. These values suggest a strengthening liquidity position, with a growing margin of safety in meeting short-term obligations.
Total cash assets consistently increased throughout the period, moving from US$17,707 million in 2021 to US$44,059 million in 2025. While current liabilities also increased, the growth in cash assets outpaced the growth in current liabilities, driving the observed improvement in the cash ratio.
- Cash Assets and Current Liabilities
- Total cash assets increased steadily each year, demonstrating a consistent build-up of liquid resources. This growth is a key driver of the improving cash ratio.
- Current liabilities also increased over the period, from US$19,705 million in 2021 to US$31,714 million in 2025. However, the rate of increase in current liabilities was less pronounced than that of cash assets, contributing to the enhanced cash ratio.
The increasing cash ratio suggests a strengthening short-term liquidity position. The company appears increasingly capable of meeting its immediate obligations without relying on other current assets or external financing.