Tesla Motors Company, Inc., began operations in 2003 but did not begin selling its stock to the public until June 28, 2010. It has lost money every year it has been in existence, and by December 31, 2013, it had total lifetime losses of approximately $1.1 billion. The company makes the Tesla Model S, and it supplies electric car components to Daimler and Toyota. Tesla’s statements of cash flows for 2011, 2012, and 2013 follow.
a. As this chapter explained, many companies that report net losses on their earnings statements report positive cash flows from operating activities. How do Tesla’s net incomes compare to its cash flows from operating activities?
b. Based only on the information in the statements of cash flows, does Tesla appear to be growing the capacity of its business? Explain.
c. In 2013 Tesla paid off $12.7 million of long-term borrowings and $2.8 million of capital leases and other debt. Where did it get the funds to repay this debt?
d. All things considered, based on the information in its statements of cash flows, does Tesla’s cash position appear to be improving or deteriorating?

  • CreatedApril 20, 2015
  • Files Included
Post your question