Financial assessment of a company is vital for an investor to decide if the business’s stock is worth purchasing. Tesla Company Limited is an innovative manufacturer that produces electric vehicles and clean energy (“Tesla,” n.d.). Founded in 2003, the company becomes a popular choice for many investors in 2021 due to high rates of electric car sales (“Tesla,” n.d.). The company’s website has the address that is “www.tesla.com” (“Tesla,” n.d.). This page represents the company and proves its trustworthiness by the comprehensive information presented.
Four financial statements should be considered to decide on investing in the company. They are balance sheets, income statements, cash flow statements, and statements of stockholders’ equity. Several significant points can be noted taking a brief look at the first three statements. Total current assets amounted to less than $100 million in 2017, while this rate equals more than $232 million in 2020 (“Tesla Motors Limited,” n.d.). Total sales were doubled since 2017, while total liabilities were increased by only $40 million (“Tesla Motors Limited,” n.d.). Therefore, the company shows a positive tendency to grow, which makes the purchasing of their stock a more attractive option.
Stockholders’ equity, often referred to as net worth, indicates a company’s financial stability. It is determined as assets minus liabilities of a company. By evaluating this rate, a company’s reliability can be determined, which is vital for investment decisions. In Tesla Motors Company’s dossier, stockholders’ equity is characterized as retained earnings that is the only financial indicator to consider in this report. Payable dividends are zero for all three years, and other related rates are absent in this company dossier (“Tesla Motors Limited,” n.d.). From the income statement, it is seen that in 2017 retained profits were $809 thousand, while for the next two years, they amounted to $2 million and $300 thousand and $5 million and $176 thousand respectively (“Tesla Motors Limited,” n.d.). Stockholders’ equity shows a strong, positive tendency to grow over time. The conclusion is that this company’s stock can be recommended to be purchased by the investor considering all the financial rates and the quality of the company website.
References
Tesla Motors Limited. (n.d.). Lexisnexis. 2021, Web.
Tesla. (n.d.). Tesla. 2021, Web.