Tesla Motors manufactures high performance electric vehicles that are extremely slick looking. Exhibit 3.20 presents the statement of cash flows for Tesla Motors for 2010-2012.

Required
Discuss the relations among net income, cash flows from operations, cash flows from investing activities, and cash flows from financing activities for the firm over the three-year period.
Describe what stage of life cycle these relations suggest for Tesla Motors. Why are negative operating cash flows less than the net losses? Where is Tesla obtaining cash, and what are they doing with it? What do you think will happen with cash flows in 2013?

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Exhibit 3.20 Tesla Motors Statement of Cash Flows (amounts in thousands) (Problem 3.17) Year Ended December 31 2012 2011 2010 Cash Flows From Operating Activities Net loss $(396,213) $(254A11) $(154328) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization Change in fair value of warrant liabilities Discounts and premiums on short-term marketable securities Stock-based compensation Excess tax benefits from stock-based compensation Loss on abandonment of fixed assets Inventory write-downs Changes in operating assets and liabilities 28,825 16,919 2,750 12 29419 10,623 5,022 56 21,156 (74) 1,504 345 1.828 Accounts receivable Inventories and operating lease vehicles Prepaid expenses and other current assets Other assets (3,222) (194,726) (13,638) (28,513) (4977) (463) (17,303) (2,829) (248) (288) 19,891 10,620 1,121 (482) 9,603 (526) s payable 187,821 Accrued liabilities Deferred development compensation Deferred revenue Reservation payment:s Other long-term liabilities Net cash used in operating activities 13,345 (156) 4801 4,707 3,515 (266,081)(128,034)(127817 (1,927) 61,006 2,641 10,255 Cash Flows From Investing Activities Purchases of marketable securities Maturities of short-term marketable securities Payments related to acquisition of Fremont man ufacturing facility (14,992) 40,000 (64,952) 40,000 and related assets Purchases of property and equipment excluding capital leases Withdrawals out of (transfers into) our dedicated Department of (65,210) (239,228) (184,226) 40,203) Energy account, net Increase in other restricted cash 8,620 (1,330) 50,121 (7359 (3,201) 1,287) Net cash used in investing activities (206,930) (162,258) (180,297) Cash Flows From Financing Activities Proceeds from issuance of common stock in public offerings, net 221,496 172410 188,842 80,000 Proceeds from issuance of common stock in private placements 59,058 (416) 204,423 Prindpal payments on capital leases and other debt Proceeds from long-tem Prindpal payments Proceeds from exercise of stock options and other stock issuances Excess tax benefits from stock-based compensation Deferred common stock and loan facility issuance costs (2,832) 188,796 (12710) 24885 (315) t debt and other long-tem i on long-tem debt 71,828 10,525 1,350 74 (3,734) 338,045 29,931 69,627 255,266 $ 99,558 Net cash provided by financing activities 419,635 (53,376 155,708 255,266 446,000 Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period 99,558 $201,890 Source: Tesla Mators, Inc, Form 10-K for the Fiscal Year Ended December 31, 2012