Tesla Inc. (NASDAQ:TSLA)

Inventory Turnover

The inventory turnover ratio shows a general declining trend from a peak near 7.0 in early 2022 down to around 5.2-5.8 in 2023 and 2024, with a slight increase again toward the end of 2024. This suggests that while inventory was being sold relatively quickly in 2021 and early 2022, turnover slowed subsequently, implying either slower sales or higher inventory levels.

Receivables Turnover

Receivables turnover increased significantly from around 16.7 in early 2020 to a peak above 38 in late 2021, indicating improving efficiency in collecting receivables. However, after that peak, the ratio declined with fluctuations, settling in the mid-20s range through 2023 and 2024, suggesting variability in receivables collection speed.

Payables Turnover

The payables turnover ratio showed a steady increase from approximately 4.1 in 2020 to over 6.0 in late 2024. This indicates that the company has been paying its suppliers faster over time, reducing the average payment period.

Working Capital Turnover

Working capital turnover rose sharply from about 2.5 in early periods to a peak over 8.1 in mid-2021, reflecting more efficient use of working capital during that time. From 2022 onwards, it steadily declined, falling to below 3.0 by mid-2025, indicating decreasing efficiency or increased working capital investment relative to sales.

Average Inventory Processing Period

The average inventory processing period generally increased from 52-53 days in 2020-2021 to 77-79 days in late 2022, suggesting slower inventory turnover or longer holding periods. This period then decreased slightly toward mid-2023 and fluctuated in 60-70 day range afterward.

Average Receivable Collection Period

The average receivable collection period improved notably from 22 days in early 2020 down to about 10-13 days in 2022-2023, reflecting faster collections. However, some increase in collection days is seen later, fluctuating between 12 and 17 days through 2024 and 2025.

Operating Cycle

The operating cycle trended downward from 82 days in early 2020 to around 65 days in early 2021, but then increased significantly to over 90 days in late 2022. This increase corresponds with longer inventory processing and fluctuating collection periods, indicating an elongated timeline to turn inventory into cash.

Average Payables Payment Period

The average payables payment period declined from around 89 days in 2020 to below 60 days by late 2024, showing faster payment to suppliers. Notable reductions occurred between late 2021 and 2024, enhancing supplier payment efficiency or reduced payable delays.

Cash Conversion Cycle

The cash conversion cycle improved significantly from positive values around 9 days in early 2021 to negative values as low as -26 days by early 2022, indicating that the company was able to convert resources to cash more quickly, often paying suppliers after receiving cash from customers. However, the cash conversion cycle gradually increased, becoming positive again in 2023 and remaining stable around 15-22 days in 2024-2025, suggesting longer cash tied up in the operating cycle.

The analysis of the quarterly financial data reveals several notable trends with respect to cost of revenues, inventory levels, and inventory turnover ratios over the observed periods.

Cost of Revenues

From the first quarter of 2020 through the second quarter of 2025, the cost of revenues exhibits a general upward trajectory, indicating increasing expenses associated with the production and delivery of goods or services. Initial values start around 4,751 million USD in early 2020, rising steadily with some fluctuations to peaks exceeding 20,000 million USD in various quarters of 2023 and 2024. Notably, there is an observed drop in the third quarter of 2025 to approximately 16,182 million USD, followed by a modest rise towards the mid-year quarter. Such volatility in later quarters may suggest operational adjustments or variable demand conditions during these periods.

Inventory Levels

Inventory levels also display a clear increasing pattern over time. Starting from approximately 4,494 million USD in the first quarter of 2020, inventory accumulates to over 14,000 million USD by the end of 2023. After reaching these highs, inventory figures fluctuate somewhat but remain elevated, staying mostly above the 12,000 million USD mark through to mid-2025. The accumulation of inventory alongside rising cost of revenues suggests potential stockpiling or growth in production capacity. The slight declines in certain quarters indicate possible inventory reductions or improved inventory management during those intervals.

Inventory Turnover Ratio

The inventory turnover ratio, available from late 2020 onwards, demonstrates a general downward trend from the initial approximate ratio of 6.07 down to values around 4.6-5.8 in subsequent quarters through 2023. Later data indicate some recovery of turnover efficiency with ratios increasing again up to around 6.68 by early 2025, before settling between 5.25 and 5.75 in the following quarters. This fluctuation implies changes in how quickly inventory is converted into sales, where a decrease could denote slower sales or overstocking, and an increased turnover suggests improved inventory utilization.

In summary, the data indicate sustained growth in both cost of revenues and inventory levels over the observed timeframe, coupled with a generally stable but fluctuating inventory turnover ratio. Together, these patterns reflect evolving operational dynamics that could be associated with scaling production, market demand variability, and strategic inventory management adjustments.

The financial data displays quarterly revenues and accounts receivable figures over several years, along with the receivables turnover ratio. The analysis highlights the following trends and observations:

Revenues

Revenues exhibit a general upward trend from early 2020 through late 2024, starting at approximately $5.985 billion in March 2020 and reaching a peak above $25 billion in multiple quarters during 2024. Noteworthy is the substantial increase seen from 2020 to 2021, where revenues rose from $5.985 billion to peaks above $17 billion by the end of 2021. Despite some fluctuations in 2022 and 2023, where revenues occasionally declined or plateaued, the overall trajectory remains positive toward the end of the available data. Some quarters in 2025 show a decline, dropping to around $19.3 billion to $22.5 billion, indicating potential softness or normalization after prior peaks.

Accounts Receivable, Net

The accounts receivable balance also generally increases over the same period, starting from $1.274 billion in March 2020 and reaching levels near $4.4 billion in June 2025. Increases in accounts receivable broadly coincide with rising revenues, reflecting higher sales on credit. Some quarters show notable fluctuations, including a decline from $3.447 billion in September 2023 to $2.520 billion in December 2023, followed by a recovery in subsequent quarters. This volatility may signal changes in credit terms, collections efficiency, or sales mix.

Receivables Turnover Ratio

The receivables turnover ratio shows marked improvement from 2020 to the later reported periods, beginning at approximately 16.72 and reaching as high as 38.07 in December 2023. This upward movement suggests increasingly efficient management of accounts receivable, with the company collecting its receivables faster relative to sales. The ratio experiences some variability throughout the quarters but generally maintains a higher level compared to 2020 values, indicating sustained effectiveness in converting receivables into cash.

In summary, the data reflects a company experiencing significant growth in revenues accompanied by a substantial increase in accounts receivable balances. The rising receivables turnover ratio implies enhanced collection effectiveness over time, although the fluctuations in receivables balances at certain points warrant attention to credit and collection practices. The late 2024 to mid-2025 period shows some revenue softness and reduced accounts receivable, possibly indicating a market adjustment or operational shift.

The quarterly financial data reveal key developments in cost of revenues, accounts payable, and payables turnover ratios over the observed periods.

Cost of Revenues

The cost of revenues demonstrates a generally upward trajectory from March 2020 through June 2025. Starting at 4,751 million USD in March 2020, it shows substantial growth, peaking periodically with some fluctuations. There is notable acceleration in the final quarters of 2021, with the cost reaching as high as 20,729 million USD in June 2024. However, some quarters exhibit decreases compared to their immediate predecessors, such as a decline from 20,394 million USD in September 2023 to 19,172 million USD in December 2023, indicating variability in operational expenses or production costs.

Accounts Payable

Accounts payable values also increase over time, although the pattern is less consistent than the cost of revenues. Beginning at 3,970 million USD in March 2020, payables tend to rise with intermittent declines, such as a decrease from 15,904 million USD in March 2023 to 13,937 million USD in December 2023. Higher values in late 2021 and early 2024 suggest increased purchasing activity or extended payment periods aligning with the growth in cost of revenues. There are also signs of payables reduction toward mid-2025, reaching 13,212 million USD in June 2025.

Payables Turnover Ratio

The payables turnover ratio, provided intermittently from September 2020 onward, shows an increasing trend with some volatility. The ratio fluctuates around approximately 4.0 in 2020 and early 2021, indicating moderate efficiency in paying suppliers. A marked increase is observable starting in late 2022, with the ratio reaching levels above 6.0 in several quarters such as March 2025, implying faster payment cycles or improved management of payables. These elevated turnover rates may reflect enhanced liquidity or strategic prioritization of supplier payments, despite the rise in absolute payables and cost of revenues figures.

In summary, the data indicate expanding operational scale as evidenced by rising cost of revenues and accounts payable. Payment efficiency, as demonstrated by payables turnover, improves notably over time. Variations across quarters highlight operational and financial management dynamics responding to business growth and market conditions.

Working Capital

The working capital demonstrates an overall upward trend from March 31, 2020, through June 30, 2025. Starting at 2,907 million US dollars in early 2020, it gradually increased, with occasional fluctuations, reaching over 31,000 million US dollars by the end of the forecast period in mid-2025. Notably, there is a significant rise starting around the end of 2022, continuing steadily into 2025, indicating enhanced liquidity or assets relative to current liabilities.

Revenues

Revenues exhibit considerable variability over the reported periods. Initial figures near 6,000 million US dollars in early 2020 display a general increasing trend, peaking around late 2022 with a maximum of approximately 25,700 million US dollars. However, there are noticeable declines in some quarters after peaks, such as drops in early 2022 and again in late 2024 and early 2025, indicating periods of revenue compression or market challenges. Despite fluctuations, the overall trend suggests growth relative to the early 2020 base, with several periods of strong revenue performance interspersed with downturns.

Working Capital Turnover

The working capital turnover ratio, available from September 30, 2020, onwards, shows initially a rapid increase from 2.53 to a peak around 8.19 by early 2022, signaling improved efficiency in using working capital to generate revenues. After this peak, the ratio progressively declines through 2025, descending to below 3 by mid-2025. This downward trend might reflect relative growth in working capital outpacing revenue growth or emerging inefficiencies in capital utilization.

Overall Analysis

The company’s liquidity position, as reflected by rising working capital, strengthens notably over the period. Revenues generally increase but with marked volatility and intermittent declines following strong quarters. The working capital turnover ratio's initial rise suggests increasing operational efficiency, although its subsequent decline points to a potential shift toward greater capital intensity or changing revenue dynamics. Together, these indicators hint at evolving operational and financial conditions, potentially driven by growth phases, market volatility, or strategic investment in working capital components.

Inventory Turnover

The inventory turnover ratio, observable from March 2021, initially shows an increasing trend, rising from 6.07 to a peak of 6.99 in March 2022. Subsequently, the ratio declines steadily to 4.6 by December 2022, indicating slower inventory movement during that period. From early 2023 to late 2023, the inventory turnover partially recovers, reaching 5.81, before again experiencing fluctuations. The ratio demonstrates volatility in the following quarters, peaking at 6.68 in September 2024 and falling again to 5.25 by June 2025. Overall, the ratio suggests periods of both improving and declining inventory efficiency, with significant variability over the analyzed timeframe.

Average Inventory Processing Period

The average inventory processing period, expressed in days, exhibits an inverse relationship with inventory turnover. Starting at 60 days in March 2021, the processing period decreases steadily to its lowest point of 52 days in March 2022. After this low, there is a clear upward trend, with the period extending to 79 days by December 2022, indicating slower processing of inventory. Throughout 2023, the days fluctuate but trend lower again to around 63 days in late 2023. The following quarters show variability, with an increase to 75 days in June 2024, then a decline, reaching 55 days in March 2025 before ending higher at 70 days in June 2025. This variability points to fluctuating inventory management efficiency and potential challenges in maintaining steady operational performance.

Overall Analysis

The data reflects cycles of operational efficiency and challenges with inventory management. The inverse patterns between inventory turnover and processing period are consistent with standard financial principles, where a higher turnover corresponds to fewer days in inventory. The initial improvement in inventory turnover and reduction in processing days until early 2022 suggests effective inventory management during that time. The subsequent decline in turnover coupled with lengthening processing times signals possible supply chain or demand disruptions. The recurring fluctuations throughout the following two years highlight ongoing adjustments and variability in inventory control effectiveness, underscoring the need for continuous monitoring and potential strategic responses to stabilize operations.

The data indicates a general improvement in the efficiency of receivables management over the analyzed quarters, as observed through the receivables turnover ratio and the average receivable collection period.

Receivables Turnover Ratio

The receivables turnover ratio shows an upward trend from 16.72 in March 2020 to peaks such as 38.07 in December 2023. This suggests an overall increase in the frequency with which receivables are collected during the year. However, fluctuations are visible, for instance, after reaching 38.07 in December 2023, the ratio declines to the mid-twenties range, indicating some variability in the collection efficiency.

Average Receivable Collection Period

The average collection period correspondingly decreased from 22 days in March 2020 to as low as 10 days in December 2023, which aligns with the peak in receivables turnover. This implies that receivables are being converted to cash more quickly over time. However, the collection period also experiences some fluctuations, rising slightly in certain quarters, such as 15 days in June 2024 and again 17 days in March 2025, indicating periodic slowdowns.

Overall Insights

The inverse relationship between the turnover ratio and the collection period throughout the timeline is consistent with expectations, reflecting improved receivables management efficiency. Periods of increased turnover generally correspond with shorter collection periods. Although the data demonstrates an overall positive trend, the variability suggests that external or operational factors occasionally affect the consistency of collection efficiency.

The analysis of the quarterly financial ratios reveals notable trends in the company's operational efficiency and working capital management over the observed periods.

Average Inventory Processing Period

The average inventory processing period remained fairly stable at 53 days during mid to late 2020. From early 2021 through mid-2022, the period fluctuated moderately between 52 and 60 days. Starting in late 2022, there is a marked increase, peaking at 79 days in September 2023, indicating slower inventory turnover. Following that peak, the period gradually decreased but showed irregular fluctuations ranging between 55 and 70 days up to mid-2025. This variability suggests periods of inventory management challenges or changes in sales velocity affecting stock turnover.

Average Receivable Collection Period

There was a consistent improvement in receivable collection from early 2020 levels of around 22 days to a low of 10 days by early 2023, reflecting enhanced efficiency in collecting accounts receivable. After reaching this optimal point, the collection period exhibited modest fluctuations, generally remaining between 12 and 15 days through mid-2025. This relatively stable collection period indicates effective credit and collection policies, contributing positively to liquidity management.

Operating Cycle

The operating cycle, the sum of inventory processing and receivable collection periods, initially declined from 82 days in early 2020 to approximately 65-68 days during 2021, signaling improved overall operational efficiency. However, from late 2021 onwards, the operating cycle lengthened significantly, peaking at 92 days in September 2023, aligned with the substantial increase in the inventory processing period. After this peak, the cycle shortened again but remained somewhat volatile between 72 and 90 days. These fluctuations imply variations in operational performance potentially influenced by inventory management and sales collection dynamics.

In summary, while receivable collection demonstrated sustained improvement and stability, inventory processing exhibited greater volatility with a notable increase in processing time during late 2022 to 2023. Consequently, the overall operating cycle experienced corresponding fluctuations, indicating periods of operational strain or adjustment in managing working capital components.

Payables Turnover Ratio

The payables turnover ratio shows an overall increasing trend from the initial recorded value of 4.12. After fluctuating slightly around the 4.0 to 4.4 range through 2020 and 2021, the ratio begins to rise more steadily starting in early 2023. It peaks in March 2025 at 6.43 before slightly declining but remaining elevated above 5.7 by mid-2025. This indicates an improvement in the company's efficiency in settling its payables over time, suggesting faster payment cycles or perhaps favorable renegotiation of payment terms.

Average Payables Payment Period (days)

The average payables payment period exhibits a generally decreasing trend, consistent with the increase in the payables turnover ratio. Beginning around 89 days in early 2020, the payment period reduces gradually to around 66-69 days during late 2022 and early 2023. The decline continues sharply through 2023, reaching a low near 57 days by mid-2025. This shortening of days payable outstanding confirms that the company is paying its suppliers more quickly over time, potentially reflecting improved liquidity management or changing supplier arrangements.

Relationship and Insights

The inverse relationship between the payables turnover ratio and the average payables payment period is clearly demonstrated. As the turnover ratio rises, the payment period in days falls, highlighting enhanced payment efficiency. The improvements are particularly notable starting from early 2023, suggesting operational or strategic changes that allowed faster settlement of payables. Maintaining a balance between payables management and liquidity is essential; however, the sustained upward trend in turnover alongside a reduced payment period suggests deliberate initiatives to optimize working capital cycles.

The analysis of the quarterly financial data reveals several trends in the company's working capital management over the reported periods.

Average Inventory Processing Period

The inventory processing period demonstrates an initial decline from 60 days to 53 days, indicating an improvement in inventory turnover efficiency during the early periods. However, in subsequent quarters, the period increases steadily, reaching a peak of 79 days, suggesting a slowdown in inventory processing. Towards the latest quarters, there is a moderate reduction again, settling around the mid-60 to low-70 day range. This fluctuation implies variability in inventory management or changes in demand and supply chain conditions.

Average Receivable Collection Period

The receivable collection period shows a clear downward trend, moving from 22 days down to a low of 10 days, reflecting improved efficiency in collecting receivables. Thereafter, the period stabilizes mostly around 10 to 15 days with minor fluctuations, indicating consistent credit collection policies and possibly improved cash inflows from customers over time.

Average Payables Payment Period

The payables payment period starts at 89 days and gradually decreases to about 66 days by the middle periods, showing a trend towards paying suppliers more quickly. However, after hitting this trough, the period fluctuates between 60 and 70 days, implying some variability in payment terms or supplier negotiations. The initial trend suggests a potential shift in payment strategy from delaying payments to more prompt settlement.

Cash Conversion Cycle

The cash conversion cycle (CCC) is negative in the early quarters, indicating that the company was able to finance its operations partially through supplier credit and rapid collection of receivables relative to inventory holding. The CCC improves from -7 days down to -26 days at the lowest point, reinforcing efficient working capital management. Nevertheless, from this point onward, the CCC begins to increase, turning positive and reaching up to 22 days in the latest period. This rise signifies that the company now holds cash in inventory or receivables longer relative to payables, potentially tying up more cash in operations. The increased CCC towards the end may indicate changes in operational efficiency, sales cycles, or supplier payment terms.

In summary, the data indicates that the company made initial improvements in working capital efficiency, especially in inventory management and receivables collection, while maintaining extended payment terms with suppliers, resulting in a strongly negative cash conversion cycle. However, in more recent periods, inventory processing times have extended and payables payment periods shortened slightly, leading to a lengthening of the cash conversion cycle. These shifts suggest evolving operational dynamics that may require further attention to optimize cash flow and working capital utilization going forward.