According to Tesla’s cash flow data, it can be seen that most of the values are negative, except for cash flow from financing activities. This balance sheet contains indicators of assets and liabilities, and in the case of Tesla, it takes positive values due to the issue of shares sold to investors (Almenhali et al., 2021). Moreover, the positive value shows the company on the best side, as this indicator signals an increase in assets.
Given the scientific nature of the Tesla company, which often allows itself bold experiments in which technology is very quickly depreciated or scrapped, negative values of operating cash flow are often seen from here. Against this background, the company is growing both assets and liabilities, which in general justifies the low indicators of the flow from operating activities, which, in addition, has turned out to be a plus in recent years.
The company invests funds for a long-term development perspective, so there are negative values in short-term aging indicators for several years. Tesla is spent on creating investment papers, and on its fixed assets, negative cash flow is inevitable. If the company sold its fixed assets, the balance would become positive, but this would have a much worse effect in the long term.
Tesla has achieved excellent results in a short time, which indicates the high potential of the company and its uniqueness. Tesla is indeed a fast-growing company, but it depends on many factors since both scientific and technological types of progress are closely related to the organization. In Tesla’s case, an increase in cash flow indicators can be predicted due to the constant growth of its revenue and through investments, from which more strategic planning of its funds will allow the company to manage better the new surplus coming in. Cash flow is difficult to predict for Tesla, given its leaps and bounds, ranging from 5 percent to 1,000 percent per year (Almenhali et al., 2021). However, the flow is increasing all the time, against which the company promotes environmentally significant projects on a planetary scale. If a new scientific discovery or technology is achieved within the framework of Tesla, the cash flow will increase disproportionately to the theory. However, within the indirect calculation method, according to the data provided, the cash flow will increase due to the positive balance of changes in cash and the comparison of indicators at the beginning and end of the period of all cash equivalents.
Almenhali, A., Alhajeri, H., Almansoori, H., Aljneibi, N., Almansoori, N., Alsulaity, N. & Nobanee, H. (2021). Financial Analysis of Tesla. Available at SSRN 3896901.