3. EXERCISE TESLA Check the Financial Statements & accounting information for Q3

Question

3. EXERCISE TESLA Check the Financial Statements & accounting information for Q3 2017 for Tesla p.4,5,6 (unaudited).

It is available in the following website:

http://ir.tesla.com/secfiling.cfm?filingID=1564590-17-21343

Answer the following Questions:

3.1.Q: How is Tesla financing the Business in 2017? Show the different ways of financing with numbers

3.2.Q: Is Tesla having Profit/Loss, please explain how they operate?

3.3.Q: What are the most important costs for Tesla Accumulated YTD ( Year to Date)

3.4.Q: How is Tesla managing their Cash Flow? How are they paying the bills?

Explanation / Answer

3.1-  Over the past few years, as its sales and stock have risen, Tesla's core business model has been shifting. The company has expanded to sell nearly 100,000 vehicles a year, the latest of which are equipped with semi-self-driving technology. To run this growth, Tesla also invested in a far-flung network of fast-charging stations.Tesla's business plan began to undergo modifications. An energy-storage business was launched, and in 2016, Tesla merged with SolarCity. The first Tesla solar product, the Solar Roof, officially went on sale last week. Meanwhile, Tesla continued to build a massive battery factory in Nevada.

3.2 - Electric-car maker Tesla reported first-quarter revenue that more than doubled, and while saying the upcoming Model 3 was on schedule for July, it downplayed the mass-market vehicle to give a sales pitch for its more expensive Model S. Chief Executive Elon Musk’s bold approach to cars, space exploration and clean energy has fueled investor enthusiasm for Tesla. But skeptics are waiting to see if Musk can fulfill his promise of producing 500,000 cars per year in 2018, or six times Tesla’s 2016 production. Shares were down about 2% in after-hours trade following the results.The automaker’s comments underscored the additional challenge of keeping up demand for its older models.“We have seen some impact of Model S orders as a function of people being confused” that Model 3 is the upgrade to Model S, Musk said on a conference call.

3.3- The American Transportation Research Institute estimates that it costs $1.59 per mile to operate the average diesel truck and that cost includes around $0.37 for fuel and around $0.26 to cover the cost of the truck and trailer payments. We can expect the cost of fuel to drop drastically but the truck payments section will likely increase due to the presumed higher cost of the Tesla truck. Until we get a breakdown of operating costs and a full purchase price, it is unclear how long it will actually take for the average carrier to break even if they purchase one. Maintenance makes up ten per cent of the operating cost for an average truck, so keeping costs low there can result in a significant savings.

3.4-  In 2017, Tesla cash flow showed a negative figure. Every month, job review site Glassdoor sifts through its mountains of data to see which occupations enjoyed the biggest wage increases.

Paychecks for retail roles, including store managers, cashiers, and more, were on the rise in Octoberas companies gear up for the holiday shopping season.

In order to plug the hole in its finances, the company just sold $1.4 billion in stock. At the rate the company is running through cash, this new monty will last only for little more than a year. The company should have taken the opportunity to sell $5 billion of stock. Its cult members – excuse me, I mean its investors – would have happily paid more than $200 per share for that many shares. It is going to be much more difficult to raise capital when the company really needs it – after the bottom falls out.

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