Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Common-Size Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2010
- Current Ratio since 2010
- Price to Earnings (P/E) since 2010
- Analysis of Revenues
- Aggregate Accruals
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Profitability Ratios (Summary)
Tesla Inc., profitability ratios
Based on: 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), 10-K (reporting date: 2020-12-31).
The financial performance indicators exhibit notable fluctuations over the five-year span under consideration. A detailed examination reveals several distinct trends across profitability and efficiency metrics.
- Gross Profit Margin
- This margin showed an upward trajectory from 21.02% in 2020 to a peak of 25.6% in 2022, indicating increasingly effective management of production and direct costs relative to sales during this period. However, a significant decline ensued in 2023 and 2024, with values dropping to 18.25% and 17.86%, respectively, which may imply rising cost pressures or pricing challenges affecting gross profitability.
- Operating Profit Margin
- Operating profitability improved markedly from 6.32% in 2020 to 16.76% in 2022, demonstrating enhanced control over operating expenses and/or improved core business profitability. Nevertheless, this positive trend reversed in subsequent years, with the margin retreating to 9.19% in 2023 and further to 7.24% in 2024, suggesting that operational efficiency or cost management faced headwinds in the later periods.
- Net Profit Margin
- The net margin experienced a robust increase from a modest 2.29% in 2020 to a height of 15.5% in 2023, signifying successful bottom-line growth and effective management of all expenses, including non-operating items and taxes. The subsequent decline to 7.26% in 2024 points to either increased expenses, reduced revenues, or other challenges impacting overall profitability.
- Return on Equity (ROE)
- ROE escalated significantly from 3.24% in 2020 to a substantial 28.09% in 2022, indicating highly efficient use of shareholders' equity to generate profits. The measure stayed relatively strong in 2023 at 23.94%, before experiencing a considerable decrease to 9.73% in 2024, which suggests diminished effectiveness in utilizing equity or possibly increased equity base without commensurate profit growth.
- Return on Assets (ROA)
- ROA rose steadily from 1.38% in 2020 to 15.25% in 2022, reflecting improvements in asset utilization and operational profitability. It slightly decreased to 14.07% in 2023 but declined more sharply to 5.81% in 2024, indicating that asset deployment became less efficient or overall asset base increased while profitability declined.
Overall, the data portrays a strong upward momentum in profitability and efficiency measures through 2022, followed by a discernible softening in 2023 and a more pronounced weakening in 2024. This pattern suggests that while financial performance improved significantly in the initial years, recent periods have presented challenges that adversely impacted margins and returns, warranting further investigation into cost structures, revenue drivers, and asset utilization strategies.
Return on Sales
Return on Investment
Gross Profit Margin
Tesla Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Revenues | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Ford Motor Co. | ||||||
| General Motors Co. | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Revenue Trends
- The company's revenues demonstrated a consistent upward trajectory over the five-year span. Starting at approximately $31.54 billion in 2020, revenues increased significantly to around $53.82 billion in 2021 and continued to rise to $81.46 billion in 2022. The growth trend persisted, albeit at a slower pace, reaching nearly $96.77 billion in 2023 and slightly increasing to $97.69 billion in 2024. This indicates a robust revenue expansion overall, with a marked deceleration in growth between 2023 and 2024.
- Gross Profit and Its Development
- Gross profit showed substantial growth between 2020 and 2022, more than tripling from $6.63 billion to $20.85 billion. However, from 2022 onwards, gross profit experienced a decline, dropping to $17.66 billion in 2023 and slightly further to $17.45 billion in 2024. This reduction in gross profit despite revenue growth points to increased costs or reduced efficiency in production or sales activities during the latter years.
- Gross Profit Margin Dynamics
- The gross profit margin followed a rising trend until 2022, improving from 21.02% in 2020 to a peak of 25.60% in 2022. This improvement suggests enhanced profitability relative to revenue during this period. However, a notable decline ensued in 2023 and 2024, with margins falling sharply to 18.25% and 17.86%, respectively. The shrinking margin alongside increasing revenues implies the company faced either higher cost pressures or competitive pricing challenges, adversely affecting its profitability ratio in the most recent years observed.
- Overall Insights
- The data indicates strong revenue growth accompanied by an increase in gross profit until 2022, reflecting operational improvements or favorable market conditions during the early years. However, from 2023 onwards, despite continued revenue gains, gross profit declined, and gross profit margins contracted significantly. This divergence signals potential cost management issues, shifts in business mix, or external factors impacting margins. The marginal revenue growth coupled with declining profitability margins in the later periods warrants further investigation into cost structure and pricing strategies.
Operating Profit Margin
Tesla Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Income from operations | ||||||
| Revenues | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Ford Motor Co. | ||||||
| General Motors Co. | ||||||
| Operating Profit Margin, Sector | ||||||
| Automobiles & Components | ||||||
| Operating Profit Margin, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Operating profit margin = 100 × Income from operations ÷ Revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Revenue Trends
- Revenues exhibited a consistent upward trajectory over the period, rising from 31,536 million US dollars at the end of 2020 to 97,690 million US dollars by the close of 2024. This represents a substantial increase, indicating strong sales growth and market expansion during these years.
- Income from Operations Analysis
- Income from operations showed significant variability, with a marked rise from 1,994 million US dollars in 2020 to a peak of 13,656 million US dollars in 2022. However, after 2022, income from operations declined notably, falling to 8,891 million US dollars in 2023 and further to 7,076 million US dollars in 2024. This pattern suggests the company experienced peak operating profitability in 2022 but faced pressures reducing operating income in subsequent years.
- Operating Profit Margin Examination
- The operating profit margin mirrored the trend seen in operating income. Starting at 6.32% in 2020, it improved steadily to its highest level of 16.76% in 2022, reflecting enhanced operational efficiency or pricing power. Nevertheless, the margin contracted significantly thereafter, dropping to 9.19% in 2023 and declining further to 7.24% in 2024. This reduction could be indicative of increasing costs, price competition, or other operational challenges impacting profitability.
- Overall Insights
- The data reveal a phase of robust growth and operational improvement culminating in 2022, followed by a period of declining operating profitability despite continued revenue growth. The divergence between sustained revenue increases and decreasing income from operations and operating margin suggests rising expenses or margin pressures. This trend warrants further investigation into cost structures, competitive dynamics, or strategic changes implemented after 2022.
Net Profit Margin
Tesla Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to common stockholders | ||||||
| Revenues | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Ford Motor Co. | ||||||
| General Motors Co. | ||||||
| Net Profit Margin, Sector | ||||||
| Automobiles & Components | ||||||
| Net Profit Margin, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net profit margin = 100 × Net income attributable to common stockholders ÷ Revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income Attributable to Common Stockholders
- The net income demonstrated significant growth from 2020 through 2023, increasing from 721 million US dollars in 2020 to a peak of 14,997 million US dollars in 2023. However, in 2024, there was a notable decline to 7,091 million US dollars, representing a decrease of over 50% compared to the previous year.
- Revenues
- Revenues consistently increased each year from 31,536 million US dollars in 2020 to 97,690 million US dollars in 2024. The growth was strong and steady, with the largest increases occurring between 2020 and 2022. The revenue growth rate slowed somewhat in 2023 and 2024, showing a plateau trend near the 97,000 million mark.
- Net Profit Margin
- The net profit margin improved markedly from 2.29% in 2020 to an apex of around 15.5% in 2023, indicating enhanced profitability efficiency during this period. However, in 2024, the margin fell sharply to 7.26%, reflecting a significant drop in profitability relative to revenue despite revenue holding steady.
Return on Equity (ROE)
Tesla Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to common stockholders | ||||||
| Stockholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Ford Motor Co. | ||||||
| General Motors Co. | ||||||
| ROE, Sector | ||||||
| Automobiles & Components | ||||||
| ROE, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROE = 100 × Net income attributable to common stockholders ÷ Stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data reveals notable trends in profitability, equity, and return on equity (ROE) over the five-year period analyzed.
- Net Income Attributable to Common Stockholders
- There is a substantial increase in net income from 2020 through 2023, growing from $721 million to nearly $15 billion. This reflects a robust growth trajectory in profitability. However, in 2024, net income declines significantly to $7.1 billion, indicating a sharp reduction compared to the previous year.
- Stockholders’ Equity
- Stockholders’ equity displays consistent growth throughout the period, rising from approximately $22.2 billion in 2020 to $72.9 billion in 2024. This steady increase suggests sustained reinvestment and accumulation of equity value despite the dip in net income observed in 2024.
- Return on Equity (ROE)
- ROE shows substantial improvement from 3.24% in 2020 to a peak of 28.09% in 2022, indicating increasing efficiency in generating profits from equity. This is followed by a decline to 23.94% in 2023 and a more pronounced drop to 9.73% in 2024. The decreasing ROE in the final years signals a reduced capacity to convert equity into net income, aligning with the observed reduction in net income in 2024.
In summary, the company experienced strong growth in profitability and equity for most of the period, peaking in 2022 and 2023, followed by a notable decline in net income and ROE in 2024. Despite this, stockholders’ equity continued to accumulate, suggesting ongoing capital retention and investment.
Return on Assets (ROA)
Tesla Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to common stockholders | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Ford Motor Co. | ||||||
| General Motors Co. | ||||||
| ROA, Sector | ||||||
| Automobiles & Components | ||||||
| ROA, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROA = 100 × Net income attributable to common stockholders ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends over the five-year period analyzed.
- Net Income Attributable to Common Stockholders
- The net income showed a significant increase from 721 million US dollars in 2020 to a peak of 14,997 million US dollars in 2023. However, there was a noticeable decline in 2024, with net income dropping to 7,091 million US dollars. This suggests a strong growth phase followed by a contraction or increased challenges in the most recent year.
- Total Assets
- Total assets increased steadily each year, growing from 52,148 million US dollars in 2020 to 122,070 million US dollars by 2024. This consistent asset growth indicates ongoing expansion and investment in the company's resources.
- Return on Assets (ROA)
- The return on assets improved markedly from 1.38% in 2020 to a peak of 15.25% in 2022. After a slight decline to 14.07% in 2023, ROA fell more sharply to 5.81% in 2024. The overall trend suggests increasingly efficient asset utilization up to 2022, with a significant decrease in efficiency in the last year examined.
Overall, the data indicates steady asset growth and rising profitability through 2023, though operational efficiency and net income experienced a notable downturn in 2024, which may warrant further investigation into underlying causes.