Complete a balance sheet and cash flows analysis for the both Tesla...

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Complete a balance sheet and cash flows analysis for the both Tesla and Toyota.

Prepare an Excel spreadsheet for the items listed below for the two companies for 4 years. You can access this information on ‘’. Enter the company name in the “Quote Search Box” and scroll down to Financials and click on Detailed Statement and you will find annual Income Statements, Balance Sheets, and Cash Flows for 4 years.

Make sure you clearly indicate denominations when appropriate.

Balance Sheet Analysis Items used by Buffett:

1.   Short-term Debt
• too much can put a company at risk
• current portion of long-term debt can indicate problems

2. Long-term Debt

    Balance Sheet/Liabilities
    ($ in millions)

      Total Current Liabilities $XX
       Long-Term Debt $XX
      Deferred Income Tax $XX
      Minority Interest $XX
      Other Liabilities $XX
      Total Liabilities $XX

• 4 year history
• little or none
• can it paid off with 3 or 4 years of net earnings? –

3. Minority Interest
• Does it exist?

4. Debt to Shareholder’s Equity – adjust for treasury shares

    Balance Sheet/Debt to Shareholders’ Equity Ratio
    ($ in millions)

      Total Current Liabilities $XX
      Long-Term Debt $XX
      Deferred Income Tax $XX
      Minority Interest $XX
      Other Liabilities $XX
      Total Liabilities $XX
• <.80

5. Preferred Stock
• none

6. Retained Earnings – p. 133
• rate of growth= ((current year-previous year)/previous year)

7. Treasury Stock
• good indicator of durable competitive advantage

8. Return on Shareholder’s Equity – formula on page 141
• Higher than other firms

Cash Flows Analysis Items used by Buffett:

1. Capital Expenditures
• 4 years – total and trend
• % of net earnings – p. 155
• 50% or less – possible competitive advantage
• 25% or less – competitive advantage

2. Buyback of company shares - p. 158
• Financing section

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Answer 1:

The short term debt of the both the companies over the years has been tabulated below.
(in millions)
                   2013             2014             2015          2016
Tesla          0.20                -               627.90      1,150.10
                   2014             2015             2016          2017
Toyota      69,456.40    80,017.10    76,067.80    82,522.40

% increase for Tesla over prev year NA NA 83.17%
% increase for Toyota over prev year 15.20% -4.94% 8.49%

It can be seen that for both the companies, the short term debt has increased significantly in 2016. While Tesla had negligible values of short term debt in 2013 and 14, it had significant debt in 2015....

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