Tesla Inc. (NASDAQ:TSLA)

Inventory Turnover

The inventory turnover ratio showed a downward trend from 6.86 in early 2021 to a low of 4.6 in the first quarter of 2023. Subsequently, it experienced some recovery, reaching 6.68 by the end of 2024, before fluctuating moderately around the mid-5 to mid-6 range through mid-2025. This pattern indicates periods of slower inventory movement, especially notable in 2022 and early 2023, followed by improvement in inventory management efficiency.

Receivables Turnover

Receivables turnover started around 19 in early 2021 and showed a general increase, peaking at 38.07 in the third quarter of 2023. After this peak, the ratio declined gradually to approximately 20.33 by the third quarter of 2025. The initial increase suggests enhanced efficiency in collecting receivables, while the subsequent decrease may reflect lengthening collection periods or changes in credit policies.

Payables Turnover

There was an overall upward trend in payables turnover, starting at 4.26 in the first quarter of 2021 and rising to above 6 by late 2024 and mid-2025. This indicates a tendency to pay suppliers more quickly over time, especially from 2022 onward, which could affect working capital and cash flow management.

Working Capital Turnover

The working capital turnover ratio increased from 3.66 in early 2021 to a peak of 8.19 in the first quarter of 2022, signaling more efficient use of working capital initially. However, from mid-2022 onwards, the ratio declined steadily, reaching a low near 2.87 by the third quarter of 2025. This reduction may indicate decreasing operational efficiency or increased investment in working capital components.

Average Inventory Processing Period

The average inventory processing period lengthened from about 53 days in early 2021 to a peak of 79 days in early 2023. This extended period aligns with the observed drop in inventory turnover during the same timeframe. Following early 2023, the period dropped below 60 days by the fourth quarter of 2024 but showed fluctuations afterwards, suggesting inventory management improvements coupled with variability in turnover speed.

Average Receivable Collection Period

The average period to collect receivables generally shortened from 19 days in early 2021 to around 10 days in the third quarter of 2023, implying more prompt collections. Thereafter, it lengthened gradually to about 18 days by the third quarter of 2025, indicating some easing in collection efforts or changes in customer payment behavior.

Operating Cycle

The operating cycle initially decreased from 72 days in early 2021 to 65 days by the end of that year, showing improved operational efficiency. Over the following years, it increased, peaking at 92 days in early 2023. Afterwards, it fluctuated but remained relatively extended, around 74 to 85 days through mid-2025, reflecting the interplay of inventory and receivables management dynamics.

Average Payables Payment Period

The payables payment period remained fairly stable around 85 to 90 days till early 2022, then shortened significantly to a range between 57 and 69 days from late 2022 through mid-2025. This reduction indicates faster payment to suppliers, which may support supplier relations but could impact liquidity.

Cash Conversion Cycle

The cash conversion cycle (CCC) was negative throughout most of 2021 and 2022, reaching a low of -26 days, meaning the company effectively used supplier credit to finance operations. Beginning in early 2023, the CCC turned positive and gradually increased to approximately 22 days by mid-2025. The shift to a positive CCC suggests a lengthening of the time between cash outflows and inflows, potentially putting pressure on working capital requirements.

The financial data reveals notable patterns in cost of revenues, inventory levels, and inventory turnover over the examined quarters.

Cost of Revenues

The cost of revenues shows an overall increasing trend with some volatility. Starting at 8,174 million USD in the first quarter of 2021, it rose steadily, reaching a peak of approximately 20,729 million USD at the end of 2023. Afterward, it fluctuated with moderate decreases and increases through 2024 and 2025, ending around 23,041 million USD in the third quarter of 2025. This upward trajectory indicates growing production or sales activities, but the fluctuations in later quarters suggest variable operational costs or shifts in sales volume.

Inventory

Inventory levels increased significantly from 4,132 million USD in early 2021 to a high point of 16,033 million USD in the first quarter of 2024, indicating accumulation of stock, possibly due to increased production or slower sales. After that peak, inventory values decreased, falling to 12,276 million USD by the third quarter of 2025. This decline following the peak could reflect improved inventory management or increased sales consuming the existing inventory.

Inventory Turnover

Inventory turnover ratio demonstrated a declining trend from approximately 6.86 in early 2021 to a low of 4.6 in the first quarter of 2023, suggesting slower movement of inventory relative to sales. Thereafter, it improved, rising back to about 6.68 in the last quarter of 2024, indicating enhanced efficiency in inventory management or sales acceleration. However, the ratio slightly decreased again towards mid-2025 but remained elevated compared to the earlier low, suggesting fluctuating but relatively better turnover.

In summary, while costs generally rose reflecting expanded activities, inventory accumulation peaked before a corrective reduction, accompanied by a corresponding inverse pattern in inventory turnover ratios. This interplay points to periods of both buildup and improved inventory utilization, highlighting dynamic operational adjustments over time.

Revenue Trend

The revenue exhibited a generally positive trend, increasing from approximately 10.4 billion USD in the first quarter of 2021 to a peak of around 25.7 billion USD by the end of 2024. Despite some fluctuations, notably a dip in early 2025 to about 19.3 billion USD in the first quarter followed by recovery to nearly 28.1 billion USD by the third quarter of 2025, the overall trajectory indicates strong growth in sales over the period analyzed.

Accounts Receivable Movement

Accounts receivable, net, showed an overall upward trajectory, rising from roughly 1.9 billion USD in March 2021 to a high of approximately 4.7 billion USD by the third quarter of 2025. The balance appears to fluctuate in relation to quarterly revenues, with notable increases during peak revenue periods. This growth suggests an expansion in credit extended to customers, correlating with higher sales volumes.

Receivables Turnover Ratio Analysis

The receivables turnover ratio reveals variability but no clear linear trend. Initially, the ratio improved from 19.02 in March 2021 to a peak of approximately 34.15 in the third quarter of 2022, indicating enhanced efficiency in collecting receivables relative to sales. However, after this peak, the ratio generally declined, reaching 20.33 by the third quarter of 2025. This decline may suggest a gradual slowdown in the collection efficiency or a relative increase in receivables compared to credit sales in later periods.

Interrelated Observations

The simultaneous increase in both revenue and accounts receivable balances, accompanied by fluctuations in receivables turnover, implies that while sales volumes escalated, the effectiveness in collecting from customers experienced intermittent variations. The peak in turnover ratio in late 2022 corresponds with heightened operational efficiency, but the subsequent decrease indicates potential challenges in collections or a shift in credit policy.

Summary

The financial data suggest consistent revenue growth and expanding credit sales over the analyzed quarters. The increasing accounts receivable balances highlight the increased credit extension to customers in line with higher sales. However, the declining trend in receivables turnover post-2022 indicates potential areas for improving collection processes to maintain healthy cash flows. Close monitoring of credit and collection strategies is advised to sustain operational efficiency amid growing sales scale.

The cost of revenues exhibits a generally increasing trend over the periods observed, with values rising from 8,174 million in early 2021 to a peak exceeding 23,000 million by the latter stages of 2025. Fluctuations are present, but the overall direction indicates growth in the company's expenditure on producing goods or services.

Similarly, accounts payable demonstrates growth throughout the timeline but at a slower pace relative to the cost of revenues. Starting at 6,648 million in early 2021, accounts payable increased to about 15,255 million by the end of 2022, fluctuated somewhat in the subsequent periods, and then settled near 12,819 million by the third quarter of 2025. This pattern suggests changes in the company's credit terms or payment policies with suppliers.

The payables turnover ratio, reflecting how efficiently the company pays off its suppliers, presents meaningful variation. Initially stable around 4.2 to 4.3 in early 2021, the ratio showed modest declines and fluctuations through 2022 dropping towards 3.95 at times. However, from early 2023 onwards, the ratio increased significantly, reaching levels above 6.0 in several quarters and maintaining elevated values through 2025. This increase signifies an improvement in payment efficiency, implying a faster rate of settling accounts payable relative to the cost of revenues.

Cost of Revenues

Steady increase over the analyzed timeframe with occasional fluctuations, indicating growing operational scale or increased input costs.

Accounts Payable

Growth observed but at a slower and more volatile rate compared to cost of revenues, potentially reflecting adjustments in supplier payment terms or operational strategies.

Payables Turnover Ratio

Initially stable with some declines, followed by a marked upward trend from 2023 onward, demonstrating improved efficiency in managing obligations to suppliers.

In summary, the financial data reflect an expanding business environment with rising costs and liabilities. However, the enhanced payables turnover ratio suggests management has taken steps to improve cash flow and supplier relationship management by accelerating payments relative to cost increases.

The financial data reveals several key trends in working capital, revenues, and working capital turnover over the observed periods.

Working Capital

Working capital exhibits a consistent upward trajectory throughout the timeframe. Starting from approximately $9.8 billion, it rises steadily, with notable acceleration in growth from mid-2023 onwards. By the last recorded period, working capital exceeds $33 billion, reflecting significant expansion in the company’s short-term financial resources available for operational needs.

Revenues

Revenues demonstrate considerable variability across the quarters. Initial growth is observed from around $10.4 billion to a peak near $24.3 billion in late 2022. However, the revenue figures fluctuate post that peak, showing declines and rebounds, culminating in a relatively strong recovery by the final quarter at nearly $28.1 billion. The pattern indicates cyclical or seasonal influences, as well as possible market or operational factors impacting sales performance.

Working Capital Turnover

This ratio, representing the efficiency with which working capital generates revenue, shows a declining trend over time. Starting at 3.66, the turnover ratio climbs to a high of 8.19 in early 2022, signaling optimal utilization of working capital. Following this peak, a gradual but persistent decline is observed, reaching approximately 2.87 by the last period. This decreasing ratio suggests that while working capital has increased substantially, revenue growth has not kept pace proportionally, indicating a reduction in working capital efficiency.

In summary, the company has significantly increased its working capital base over the periods analyzed. While revenues have fluctuated, an overall growth trend is evident. The declining working capital turnover ratio points to diminishing operational efficiency in leveraging working capital to generate revenue, which might warrant further investigation into asset utilization or inventory management strategies.

The data reveals several noteworthy trends in inventory management metrics over multiple quarters. Inventory turnover shows a fluctuating pattern, with periods of both decline and improvement. Initially, the turnover ratio remains relatively stable in the early quarters, hovering around 6.8 to 7.0, before gradually decreasing to a low of approximately 4.6 by the first quarter of 2023. Subsequently, turnover improves with some volatility, reaching a peak of about 6.7 towards the end of the series.

Inventory Turnover Ratio

This metric indicates how many times inventory is sold and replaced over a period. Early data points suggest strong inventory movement, but the ratio dips significantly in the mid period, highlighting slower inventory sales or excess stock accumulation. The later quarters reveal a recovery trend, although the ratio remains below the initial highs in several instances, indicating variable inventory efficiency.

Average Inventory Processing Period

The average processing period in days exhibits an inverse relationship with turnover, as expected. Early periods see processing around 52-53 days, which then lengthens substantially to a peak of 79 days by early 2023, indicating slower inventory conversion to sales. Following this peak, there is a gradual reduction and subsequent oscillation between approximately 55 to 70 days, suggesting attempts to optimize inventory turnover rates.

Overall, the interplay between these two indicators highlights challenges in maintaining consistent inventory efficiency. The mid-period deterioration suggests potential issues such as supply chain delays, demand fluctuations, or production bottlenecks. The later partial recovery signals adjustments possibly related to inventory management strategies or market conditions. Continued monitoring of these metrics is critical to identify underlying causes and improve turnover consistency while minimizing the holding period.

Receivables Turnover

The receivables turnover ratio exhibits considerable fluctuation over the observed periods. Initially, it increased from 19.02 to a peak of 28.14 within the first year, indicating enhanced efficiency in collecting receivables. This upward trend continued in most quarters during 2022, reaching values above 30, suggesting further improvement. However, towards the end of 2022 and continuing into 2023 and beyond, the ratio displayed notable volatility, with significant drops to the mid-20s and occasional rebounds to higher levels, such as 38.07 in the third quarter of 2023. In the most recent periods, the ratio has generally declined to around 20.33, marking a reduction in turnover efficiency compared to prior peaks.

Average Receivable Collection Period

The average receivable collection period moved inversely to the receivables turnover, as expected. It started at 19 days, decreasing steadily to a minimum of 10 days by the third quarter of 2023, reflecting quicker collection cycles. After reaching this low, the collection period increased intermittently, fluctuating between 12 and 18 days in subsequent quarters. This trend indicates a lengthening time to collect receivables in the later periods, with a noticeable rise to 18 days by the third quarter of 2025, suggesting a potential loosening in credit terms or collection effectiveness.

Overall Trend and Insights

The data reveal a strong initial improvement in receivables management, with turnover ratios increasing and collection periods shortening significantly. However, this positive movement has not been entirely sustained, as indicated by the later period volatility and reversal in trends. The latter years show decreasing turnover ratios alongside increasing collection periods, signaling possible challenges in receivables collections or changes in credit policies. This fluctuation could impact cash flow stability and may warrant further investigation to identify underlying causes and potential corrective actions.

Average Inventory Processing Period

The average inventory processing period demonstrated a gradual upward trend from the beginning until the end of 2022, increasing from 53 days in March 2021 to a peak of 79 days by March 2023. This suggests that inventory was held for longer durations during this period, potentially indicating slower turnover or increased stock levels. After reaching this peak, the period showed fluctuations with a notable decrease to 55 days by December 2024, followed by intermittent increases and decreases, ending at 56 days in September 2025. Overall, this indicates a somewhat volatile but slightly improving inventory management in recent quarters.

Average Receivable Collection Period

The average receivable collection period exhibited an initial decline from 19 days in early 2021 to 10 days by September 2023, signaling enhanced efficiency in collecting receivables over this timeframe. However, after this point, the collection period began to rise again, reaching 18 days by September 2025. This upward trend in the latter period suggests some challenges or changes in credit management or customer payment behavior, leading to longer collection times.

Operating Cycle

The operating cycle mirrored the trend seen in the average inventory processing period, starting at 72 days in March 2021 and peaking at 92 days in March 2023. This lengthening of the operating cycle points to slower conversion of inventory and receivables into cash. Following the peak, the cycle shortened steadily to 72 days by December 2024, indicating improved operational efficiency, before increasing again to 85 days by September 2025. These fluctuations highlight variability in the overall working capital cycle with a tendency towards periodic improvements and setbacks.

Summary

Throughout the observed period, the company’s inventory turnover generally slowed until early 2023, after which measures appear to have been taken to reduce inventory days, reflected in a subsequent decrease. Receivables collection became more efficient up to mid-2023 but deteriorated afterward. The operating cycle’s movements correspond closely with changes in inventory and receivables periods, reflecting variability in the company’s working capital management. The recent upturn in both receivable collection and operating cycle durations suggests emerging challenges in cash conversion efficiency that may require management attention.

The analysis of payables turnover and average payables payment period over multiple quarters reveals several discernible trends in the company's payment practices and supplier management efficiency.

Payables Turnover

The payables turnover ratio exhibits an overall upward trend from the beginning to the end of the observed periods. Starting around 4.26-4.36 in early 2021, the ratio experienced some fluctuations in mid-2021 to late-2022, varying between approximately 3.95 and 4.37. Notably, from early 2023 onward, the ratio demonstrates a more pronounced increase, reaching a peak of around 6.43 before slightly settling near 6.19 in the last quarter recorded.

This rising ratio suggests an improvement in the speed at which the company is settling its payables relative to its purchases or cost of goods sold, implying enhanced efficiency in managing payables or possibly benefiting from better credit terms or stronger cash flow conditions.

Average Payables Payment Period

The average days payable outstanding inversely mirrors the payables turnover trend, showing a general decline from roughly 86 days at the start of 2021 to under 60 days by the latest quarters.

There are periods of stability and minor increase, particularly during late 2021 and early 2022 with averages close to 90 days, but beyond this, there is a clearer downward trajectory reaching as low as 57 days in mid-2025.

This reduction in the payment period indicates that the company is paying its suppliers in a shorter timeframe as the years progress, which could reflect changes in payment policies, stronger negotiation positions with suppliers, or improved liquidity allowing faster settlements.

Overall, the trends in these key payables metrics reflect a strategic shift towards faster payment cycles over the analyzed timeline. The increase in payables turnover alongside the shortening payment period denotes better working capital management. This evolution could reduce supplier tension and may positively impact supplier relationships, although it might also influence the company’s short-term cash flows depending on other financial factors not analyzed here.

The analysis of key financial periods over the observed quarters reveals notable fluctuations and trends in the company's operational efficiency and cash management practices.

Average Inventory Processing Period

This period demonstrates an increasing trend from 53 days in early 2021 to a peak of 79 days by the first quarter of 2023. Subsequently, it shows a tendency to decrease periodically, settling around 56 to 70 days in the last reported quarters. The initial lengthening suggests slower inventory turnover or increased stock levels, while the later reductions potentially indicate improved inventory management or changes in sales patterns.

Average Receivable Collection Period

The collection period generally remains stable, fluctuating mostly between 10 to 19 days. It decreased from 19 days in early 2021 to a low of 10 days in the third quarter of 2023, suggesting improved efficiency in receivables collection during this span. However, the collection period slightly deteriorates afterward, returning to about 18 days by late 2025, which could imply slight leniency or delays in payment collection toward the end of the timeline.

Average Payables Payment Period

This period exhibits a gradual decline from 86 days in early 2021 to around 57-63 days in mid to late 2025. Such a trend indicates a shorter time taken to pay suppliers, possibly reflecting changes in cash management strategy, supplier agreements, or availability of cash resources. The initial longer payment periods may have supported working capital, whereas the later compression could affect liquidity.

Cash Conversion Cycle

The cash conversion cycle (CCC) started with negative values, reaching as low as -26 days in the fourth quarter of 2021, implying that the company collected cash from sales before paying its suppliers, a sign of strong working capital management. Over time, the CCC gradually increases, moving into positive territory by early 2023 and peaking at 22 days in mid-2025. This upward shift indicates a lengthening cycle, where cash is tied up longer in the operating cycle, which may impact liquidity negatively if not managed carefully.

In summary, the company experienced greater inventory holding times and marginally extended receivable collections and payables payments over the observed period, culminating in a lengthening cash conversion cycle. Monitoring these metrics remains crucial to ensure optimized liquidity and operational efficiency moving forward.