Financial Performance Evaluation of Tesla

OBJECTIVE

You are to assume you have been recently hired by The Company and have been assigned to a team that reports to the CEO of THE COMPANY (I CHOSE TESLA, TICKER: TSLA). The head of your team is the CFO who is concerned about TESLA’s current financial performance and comparison against major competitors in the industry and the impact that may have on the firms stock price. The CFO would like your team to provide insights that will help them to project future financial performance. Specifically, the primary question to answer is: will TESLA be financially viable over the next two to three years, and which steps should be done to improve its financial stability?

You work for the company you are analyzing.

SUGGESTED WEBSITES

www.morningstar.com – To find the information for your company you need to type the stock symbol in the Quoteswindow to get into the companys page.

www.marketwatch.com  -To find the information for your company you need to type the stock symbol in the Searchwindow to get into the companys page.

www.Finviz.com – To find the information for your company you need click on Screener on the top of the screen, type the stock symbol in the Ticker window to get into the companys page., and click on the company in the list.

www.money.cnn.com  -To find the information for your company you need to type the stock symbol in the Searchwindow to get into the companys page.

www.finance.yahoo.com – To find the information for your company you need to type the stock symbol in the Searchwindow to get into the companys page.

www.nyse.com Click on Data, then click on Stocks (under Quotes), and type the name of the company or the stock symbol in the window Keyword or symbol to get into the companys page.

www.nasdaq.com – To find the information for your company you need to type the stock symbol in the Search window to get into the companys page.

Companys websites

YOUR SPECIFIC ASSIGNMENT

Using the information from the websites the student will develop evaluation of the financial performance for TESLA. (The evaluation portion will total 85% of the assignment grade) 

-1Introduction (3% of the project grade)- The paper should begin with a short introduction, explains the purpose of the paper, and provides an overview of the contents that follow (one short paragraph).

Your purpose is stated in the objective paragraph. You are to analyze the financial health of your company.

2 Trend analysis (20% of the project grade)

Analyze the financial trends over the last 5 years of

Sale Growth,
COGS Growth,
Gross Income Growth,
Interest Expense Growth,
Net Income Growth,
Cash & Short Term Investments Growth
Assets – Total – Growth.
You can find these ratios in the Internet or calculate them. If you use published ratios you must indicate that and cite their source.

These growth rates are available in www.marketwatch.com  -To find the information for your company you need to type the stock symbol in the Search window to get into the companys page. Click on Financial > Income Statement (or Balance Sheet) > click on View Ratios.

To present your findings, you will create the table(s) and/or graphs. You can use the bar graphs provided by www.marketwatch.com or create your own ones.

Write about 1-2 pages of the analysis of the financial conditions, its stability, and trends. What important information does this analysis provide?

You have five years of data for each of the items above. What sticks out? What I would do is calculate the percentage of growth over the five years for each of these. This is easily done by using the rate function. Trends may stick out. Perhaps sales didnt grow much but the COGS growth rate is much higher. Is this problematic? Write what you are seeing for each of the items above.

-3 Financial ratio analysis. (25% of the project grade)

In this part of the project you will complete ratio analysis of TESLA. Please remember that you are the financial analyst of TESLA and should prepare the report to be read by the chairman (CEO) of TESLA. The ratio analysis should be completed from the point of view of TESLAs management.

The chairman of TESLA is especially concerned about the following groups of ratios:

Liquidity (current ratio, quick ratio)
Operating performance ratio (Days of Sales in Inventory, Days of Sales Outstanding, Days of Payables Outstanding), Receivables Turnover, Inventory Turnover, Fixed Assets Turnover, Total Assets Turnover)
Profitability ratios (Gross Profit Margin, Operating Profit Margin, Net Profit Margin)
Return on Investment ratios: (ROA, ROE)
These ratios are available on www.morningstar.com > Companys page under Financials and under Operating Performance

You can find financial ratios for the company for the last 1-5 years in the Internet or calculate them. If you use published ratios you must indicate that and cite their source.

Present the ratios as the table(s) in your project. Create graphs for some ratios on your choice over three years to show trends.
I must see all the required ratios. You dont have to calculate them. Just find them and put them in a table. Pick a couple that stood out to you and create a graph. You do this in Excel and then copy/paste it into your report. The graph should contain three years worth of data. You can pick one or more of the ratios to graph. Whatever you think is important.

b) Write 2 pages (or more) of analysis of the ratio results that you found. In your analysis you should answer the following questions:

How liquid is the company?
Is management generating a substantial profit on the companys assets?
If the management of the company would like to improve the companys financial performance, what should the management of TESLA do?
I need to see these three questions answered by you.

-4- Evaluate Return on Equity for the company for the last three years using the DuPont analysis. (17% of the project grade).

You can find these ratios in the Internet or calculate them. If you use published ratios you must indicate that and cite their source.

a.  Find ROE, Net profit margin (listed as net margin), asset turnover, financial leverage for the last three years for your company. You also may use debt/equity ratio in your analysis. Present the ratios as the table(s) in your project.

b.  Find ROE, Net profit margin (listed as net margin), asset turnover, financial leverage for the last year for its major peer competitor. You also may use debt/equity ratio of peer competitor in your analysis. Present the ratios as the table(s) in your project.

c.  Has the companys ROE changed over the last three years? What was the main factor that influenced this change?

d.  Compare the ratios of you company to the peer competitor. If the management of the company would like to improve their return on equity, what should the management of the company do?

Write about 1 page of analysis to answer the questions (c) and (d).

I need to see the ratios in the table and you need to answer questions c and d fully.

-5- Develop a specific recommendation, with supporting rationale, as to whether the assigned company’s recent trends and results in financial performance is of sufficient financial strength, will TESLA be financially sustainable over the next two to three years, and which steps should be done to improve its financial stability? (about 1 page) (15% of the project grade).

This is your opinion. I dont want to get the opinion of experts on the web.

-6- Reflection the student should write a paragraph in their own words reflecting on specifically what they learned from the assignment and how they think they could apply what they learned in the workplace. (5% of the project grade)

Please do not forget this part. Tell me what you learned. Also, even if you cannot apply it to work, just state that.

PRESENTATION OF PAPER AND WRITING (15%) of the project grade):

-Organization, Format and Presentation of Paper including the Title page, Introduction, Body, and Summary. Each section of the paper must begin with sub-headings.  Please use the sub-headings included in the assignment. Please use double spaced, with one-inch margins, and use 12-point Times New Roman font. (4% of the project grade)

Use of Tables, Figures and Other Graphics to Summarize and Support Analysis Presented in the Paper. All tables and charts should have the numbering system, like Table 1, the title, and foot/end note to reference the source of the information. (3% of the project grade)

Logical and Smooth Flowing Transitions and Relationships among Sections of the Written Report (3% of the project grade)

Research Sources and Significance of Research Information and Data, Use of APA Citation Methodology (5% of the project grade)

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Order Now

Top