![Question 1 of 15
1.0 Points
Accepted characters: numbers, decimal point markers (period or
comma), sign indicators (-), spaces (e.g., as thousands
separator, 5 000), "E" or "e" (used in scientific
notation). NOTE: For scientific notation, a period MUST be
used as the decimal point marker.
Complex numbers should be in the form (a + bi) where "a" and
"b" need to have explicitly stated values.
For example: {1+1i} is valid whereas {1+i} is not. {0+9i} is
valid whereas {9i} is not.
Below is the simple crosstab for Beta Blocker use vs. Low
HDL. The natural log of the odds ratio [ln(OR)]=
Question 2 of 15
1.0 Points
Accepted characters: numbers, decimal point markers (period or
comma), sign indicators (-), spaces (e.g., as thousands
separator, 5 000), "E" or "e" (used in scientific
notation). NOTE: For scientific notation, a period MUST be
used as the decimal point marker.
Complex numbers should be in the form (a + bi) where "a" and
"b" need to have explicitly stated values.
For example: {1+1i} is valid whereas {1+i} is not. {0+9i} is
valid whereas {9i} is not.
Using the table from question 1, the standard error of ln(OR)=](https://image.slidesharecdn.com/question1of151-221026123408-12cec081/85/Question-1-of-151-0-PointsAccepted-characters-numbers-de-docx-1-320.jpg)
![market[footnoteRef:2], as well as possibly spreading out to the
public transportation market. All of, but specifically the energy
storage market is a serious departure from the norms of the auto
industry and it sets Tesla apart from its competitors. [2:
"Analyzing Tesla's Return on Equity (TSLA, FCAU)."
Investopedia,
www.investopedia.com/articles/markets/031416/analyzing-
teslas-return-equity-tsla-fcau.asp.]
Ratio Analysis
C. Efficiency
Based up the accounts payable turnover, Tesla, generally, has a
smaller amount of accounts payable than General Motors. When
observing the Days Payable Outstanding ratio, it is clear that
Tesla quickly and efficiently pays back its suppliers in
comparison to General Motors. Having a smaller amount in
accounts payable is a testament to Tesla’s ability to accurately
forecast sales and production costs. However, when considering
the market share of General Motors, there is likely little
advantage gained by Tesla through its superior efficiency.
Suppliers are likely to be interested in doing business with
General Motors, regardless of their tendency to be less efficient
that Tesla, because General Motors makes massive orders on
supplies and represents a huge opportunity for growth. As long
as General Motors is solvent, they should see little negative
effect from their inefficiency. Additionally, Tesla has shown
massive improvement to its efficiency over the previous three
year period, which indicates positive results in the future.
Ratio Analysis](https://image.slidesharecdn.com/question1of151-221026123408-12cec081/85/Question-1-of-151-0-PointsAccepted-characters-numbers-de-docx-20-320.jpg)
Question 1 of 151.0 PointsAccepted characters numbers, de.docx
- 1. Question 1 of 15 1.0 Points Accepted characters: numbers, decimal point markers (period or comma), sign indicators (-), spaces (e.g., as thousands separator, 5 000), "E" or "e" (used in scientific notation). NOTE: For scientific notation, a period MUST be used as the decimal point marker. Complex numbers should be in the form (a + bi) where "a" and "b" need to have explicitly stated values. For example: {1+1i} is valid whereas {1+i} is not. {0+9i} is valid whereas {9i} is not. Below is the simple crosstab for Beta Blocker use vs. Low HDL. The natural log of the odds ratio [ln(OR)]= Question 2 of 15 1.0 Points Accepted characters: numbers, decimal point markers (period or comma), sign indicators (-), spaces (e.g., as thousands separator, 5 000), "E" or "e" (used in scientific notation). NOTE: For scientific notation, a period MUST be used as the decimal point marker. Complex numbers should be in the form (a + bi) where "a" and "b" need to have explicitly stated values. For example: {1+1i} is valid whereas {1+i} is not. {0+9i} is valid whereas {9i} is not. Using the table from question 1, the standard error of ln(OR)=
- 2. Question 3 of 15 1.0 Points Using the answer for the two previous questions, calculate a 95% CI for OR (Note, you will have to convert your answer from log form before you select an answer). A. 2.795 - 8.449 B. 1.644 - 14.368 C. 1.028 - 2.134 D. .497 - 2.665 Reset Selection Question 4 of 15 1.0 Points In this assignment, you will use the data set “birthwt3.sav”, in homework files under resources. This time we will use the clinical criterion for low birth weight (<2500 grams) to determine whether the baby is of low birth weight. Then you will use logistic regression to examine the effects of risk factors on the chance of a mother having a low birth weight baby. The dataset contains the following variables: ID: Mother’s identification number MOTH_AGE: Mother’s age (years) MOTH_WT: Mother’s weight (pounds) RACE: Mother’s race (1=White, 2=Black, 3=Other) dummy variables (Black, White and Other) are already coded in the data set.
- 3. SMOKE: Mother’s smoking status (1=Yes, 0=No) PERM: History of premature labor (number of times) HYPE: History of hypertension (1=Yes, 0=N0) URIN_IRR: History of urinary irritation (1=Yes, 0=N0) PHYS_VIS: Number of physician visits BIRTH_WT Birth weight of new born (grams) LBW: Dummy variable, coded 1 if the baby has low birth weight Run a logistic regression to predict the outcome “LBW” using Smoke, Black and Other as the independent variables. Based on the logistic regression results, match the odds ratio for each of the variables. A. 3.053 B. 3.030 C. 2.957 1. Smoke 2. Black 3. Other Question 5 of 15 1.0 Points We cannot make which of the following conclusions based on
- 4. the results above? A. Adjusting for smoking status, the odds of having low birth weight baby for Black women and women of other race is about 3 times the odds for White women. B. The effect of smoking on the risk of having low birth weight baby is the same for women of different races. C. The effect of smoking on the risk of having low birth weight baby is higher among black women than among white women. D. Adjusting for race, smoking increases the risk of having birth weight baby significantly. Reset Selection Question 6 of 15 1.0 Points Accepted characters: numbers, decimal point markers (period or comma), sign indicators (-), spaces (e.g., as thousands separator, 5 000), "E" or "e" (used in scientific notation). NOTE: For scientific notation, a period MUST be used as the decimal point marker. Complex numbers should be in the form (a + bi) where "a" and "b" need to have explicitly stated values. For example: {1+1i} is valid whereas {1+i} is not. {0+9i} is valid whereas {9i} is not. The odds of having low birth weight baby for a Black women who smoked during pregnancy is Question 7 of 15 1.0 Points Run a second logistic regression to further include “age” and
- 5. “weight” as independent variables. Based on the logistic regression results, which one of the following statements is incorrect? A. After further adjusting for mother’s age and weight, smoking is still an important risk factor for having low birth weight baby. B. After further adjusting for mother’s age and weight, the racial gap between black and white women in terms of their risk having low birth weight baby widened a little bit. C. After controlling for age, race and smoking status, mothers who weigh more may have a lower risk of having low birth weight baby. But this finding is barely significant at 5% level. D. After controlling for mother’s weight, race and smoking status, older mothers have a lower risk of having low birth weight baby. This finding is significant at 5% level. Reset Selection Question 8 of 15 1.0 Points Accepted characters: numbers, decimal point markers (period or comma), sign indicators (-), spaces (e.g., as thousands separator, 5 000), "E" or "e" (used in scientific notation). NOTE: For scientific notation, a period MUST be used as the decimal point marker. Complex numbers should be in the form (a + bi) where "a" and "b" need to have explicitly stated values. For example: {1+1i} is valid whereas {1+i} is not. {0+9i} is valid whereas {9i} is not.
- 6. Based on the model above, what is the odds of having low birth weight baby for a 25 year-old Black woman who weighs 120 pounds and who did not smoke during pregnancy? Question 9 of 15 1.0 Points Run a third logistic regression to further include variables about medical history including: history of premature labor, hypertension, urinary irritation and number of physician visits. Check “Hosmer and Lemeshow goodness-of fit” statistics in “Options." Check "Probabilities" and "group membership" in "Save." Which one of the following variables regarding medical history has significant impact (at level 5%) on the risk of women having low birth weight babies? A. History of premature labor B. History of hypertension C. History of urinary irritation D. Number of physician visits Reset Selection Question 10 of 15 1.0 Points Accepted characters: numbers, decimal point markers (period or comma), sign indicators (-), spaces (e.g., as thousands separator, 5 000), "E" or "e" (used in scientific notation). NOTE: For scientific notation, a period MUST be used as the decimal point marker. Complex numbers should be in the form (a + bi) where "a" and
- 7. "b" need to have explicitly stated values. For example: {1+1i} is valid whereas {1+i} is not. {0+9i} is valid whereas {9i} is not. Based on the third model, overall what percentage of the sample is correctly predicted? (Please do not include "%" in your answer. If it is 50.0%, write 50.0) Question 11 of 15 1.0 Points Accepted characters: numbers, decimal point markers (period or comma), sign indicators (-), spaces (e.g., as thousands separator, 5 000), "E" or "e" (used in scientific notation). NOTE: For scientific notation, a period MUST be used as the decimal point marker. Complex numbers should be in the form (a + bi) where "a" and "b" need to have explicitly stated values. For example: {1+1i} is valid whereas {1+i} is not. {0+9i} is valid whereas {9i} is not. For the participant on line 73 (ID number 164.00), what is the predicted probability of LBW using model 3. (Hint, to find the answer you will have to go to data view and pull it out of the dataset under the PRE_ column). Report the number exactly as it appears in the data Question 12 of 15 1.0 Points Is the participant on line 94 of the dataset (ID number 188.00) correctly classified by the model. (Once again you will have to look at the data view and the PGR_ column) A. Yes B. No
- 8. Reset Selection Question 13 of 15 1.0 Points Accepted characters: numbers, decimal point markers (period or comma), sign indicators (-), spaces (e.g., as thousands separator, 5 000), "E" or "e" (used in scientific notation). NOTE: For scientific notation, a period MUST be used as the decimal point marker. Complex numbers should be in the form (a + bi) where "a" and "b" need to have explicitly stated values. For example: {1+1i} is valid whereas {1+i} is not. {0+9i} is valid whereas {9i} is not. What is the Cox Snell Pseudo R square for model 3? Question 14 of 15 1.0 Points What is the null hypothesis for the Hosmer–Lemeshow test? A. The logistic regression model fits the data well. B. The logistic regression model does not fit the data well. C. All the independent variables are significant. D. None of the independent variables are significant. Reset Selection Question 15 of 15 1.0 Points Based on the Hosmer–Lemeshow test, the thrid logisitic regression fits data well.
- 9. True False Reset Selection Financial Analysis Project PART TWO- EXCHANGE AND STOCK PRICE 1. Identify what stock exchange the company trades on. STOCK EXCHANGE NasdaqGS 2. Track the weekly stock price of your company and its competitor. Date Company Closing Stock Price Competitor Closing Stock Price 16-Sep-16 205.40 30.97 23-Sep-16 207.45 32.12 30-Sep-16 204.03 31.77 7-Oct-16 196.61 32.34 14-Oct-16 196.51 31.87
- 10. 21-Oct-16 200.09 32.04 28-Oct-16 199.97 31.32 4-Nov-16 190.56 31.16 11-Nov-16 188.56 34.02 18-Nov-16 185.02 33 25-Nov-16 196.65 34.25 *TSLA and GM have different stock exchange platforms- Tesla trades on Nasdaq, while GM trades on NYSE that can explain why there is such a big difference in numbers 17 TESLA Horizontal Analysis A. Balance Sheet Looking at Tesla’s balance sheet since 2013 to 2015, we can
- 11. recognize that Tesla has been growing rapidly. First, Tesla’s assets have grown 142.01% from 2013 to 2014. Tesla’s electric vehicles has been receiving a lot more attention, and therefore, had much larger sales compared to 2013. Comparing the same time period, total liabilities rose as much as total assets did. Total liabilities rose 178.85% from 2013 to 2014, which mostly came from electric vehicle production. When we compare the balance sheet of 2014 to 2015, it is much different from the comparison of the balance sheet of 2013 to 2014. Comparing balance sheet of 2014 to 2015, increase in total assets was 38.35% and increase in liabilities was 42.67%. Although the changes in percentage of 2014 vs 2015 is much smaller than those of 2013 vs 2014, Tesla has still grown very large. When looking at the true value, during 2013 the total liability was $1749.81 and during 2015 the total liability was $6961.47. We can see that the liability is continuously rising due to its continuous growth; as sales are increasing, which we can see through total assets, liabilities are continuously increasing so that Tesla can provide more convenience and high leveled technology to its consumers. Tesla is progressively adding new supercharger stations in the states and developing new ways that they can provide environmentally friendly vehicles to a larger consumer group. When we compare the balance sheet to Tesla’s competitor, General Motors, in terms of percentages, Tesla wins big time. Tesla’s assets, liabilities, and stockholder’s equity has been increasing more tremendously than those of General Motors. However, the main reason is that Tesla is still considered a fairly new company compared to General Motors. Tesla’s first electric vehicle, Model S, started deliveries during June 22, 2012, while General Motors have been making larger number of sales and reputation since 1908. When we compare the true value of Tesla’s 2013 total assets, which is $2416.93, and General Motors’ 2013 total assets, which is $166,344, we can see that General Motors’ assets are about 66 times larger than Tesla’s assets. However, in terms of percentages, Tesla’s assets
- 12. increased 142.01% while General Motors’ assets increased 6.81%. The percentage tells us either that Tesla has grown much more vastly than General Motors did during 2013-2014 or that General Motors have already reached their top and cannot expand a lot further than this point. Despite its small values, Tesla seems more likely to expand much more in the future than General Motors. Not only because there is a lot development that can be made through its new company, but also because the company is unique and innovative itself. All electric vehicles were not as popular when Model S came out because of its extremely high price. However, people were very interested in Tesla because their technology was entirely environmental friendly and their vehicles had a unique design. Through the public’s attention to the Tesla brand, Tesla was able to create their Model 3 which has a price more approachable to a larger consumer group, and therefore, have a larger likelihood of expanding their assets and profit in the future. Horizontal Analysis B. Income Statement Tesla has been worsening over time. Throughout the past three years, Tesla has been seen acquiring gradually depreciating net incomes despite the increasing revenues. Its net incomes were - $74.01, -$294.04, and -$888.66 in 2013, 2014, and 2015 respectively. With this said, Tesla’s profitability has been declining as its net incomes has seen an average change of - 249.76%. It is an apparent trend that expenses have been significantly outweighing gross profit, resulting in a negative gross income. Moreover, expenses have also been growing significantly from 2013 to 2015. Expenses in 2013, 2014, and 2015 were $1,775.05, $3,991.50, and $7383.96 respectively. This accounts for an average increase of 104.94% in expenses
- 13. throughout the three year period. The year 2014, seems to have been Tesla’s worst year as all expenses have seen over a 100% change. Selling, general and administrative expenses for those two years saw itself displaying a 106.43% increase. Advertising saw a 443.33% increase from $9.00 to $48.90. Depreciation and amortization saw a 118.63% change. Rent and other expenses accounted for a 115.35% and a 131.60% change. Tax expenses, in particular, changed dramatically with a 743.23% increase, from $12.73 to $107.35. Compared to the company’s competitor, GM Motors, Tesla has not been as profitable. GM Motors found itself with net incomes of $5,346, $3,949, and $9,687 in 2013, 2014, and 2015, respectively. This represents the average increase of 59.59% in profit. GM Motors, however, does seem to have stagnant or even declining revenues over the past three years. With only a 0.32% change in revenues between 2013 and 2014 and a decline of -2.29% in revenues between 2014 and 2015, it does not seem like GM can find itself making significant increase in sales. · Tesla has not reported any discontinued operations on their income statements for the past three years. · Tesla has not reported any extraordinary items on their income statements for the past three years Horizontal Analysis C. Cash Flow Statement Tesla’s cash flow overall is not improving or worsening. As stated previously on the income statement comments, Tesla is still a novel vehicle company. Therefore, we can’t determine Tesla’s status in terms of cash flow by looking at the three year period data. From 2013 to 2015, Tesla’s operating cash flow has decreased from 257.94 to -524.499. Looking at the negative value of operating cash flow, we may assume that Tesla might not be able to maintain and grow its operations. However, when
- 14. we take into account that Tesla is still one of the more novel vehicle companies, we can understand that large sums of cash flow in investment is necessary and as a result lowering the operating cash flow. All of the net income values were negative, so it is nearly impossible to maintain a positive operating cash flow. The negative values of the operating cash flow doesn’t seem to be a huge conflict because it is natural when bringing a new product to a market. Tesla’s investing cash flow has been significantly decreasing throughout 2013 to 2015. During 2013, the value of investing cash flow was -249.217, and during 2015 it was - 1673.551. From 2013 to 2014, there has been a decrease in investing cash flow by 297.42%. Looking at the cash flow as a whole, we realize that the significant increase in investing cash flow is not a problem because period 2014 and 2015 both have negative operating cash flow; so, we know that Tesla has been mainly having investment expenditures that were essential to its company. Unlike Tesla’s operating and investing cash flows, its financing cash flow has been increasing. From 2013 to 2014, its financing cash flow increased 237.28%. However, in 2015 it decreased 28.91%, but it remained higher than that of 2013. Because of Tesla’s different trends in cash flow, it is hard to answer whether the company is improving or worsening over time. When we compare the cash flow data to that of General Motors, we can easily decide whether the company is improving or worsening. From 2013 to 2014, the operating cash flow decreased 20.36%. Therefore, General Motors spend on investment expenditure as much. From 2013 to 2014, its investing cash flow only increased 9.3%. After General Motors was able to increase its operational cash flow by 19.09%, it rapidly increased its investing cash flow by 78.59%. General Motors is more likely to have a stronger strategic plan in terms of cash flow because they have more and stronger data from their previous cash flow records. Hence, general Motors is able to maintain its steady increase in financing cash flow.
- 15. 1. The discrepancy when comparing the net income of 2013, 2014, and 2015 to the operating cash flows of the same years seems to grow smaller. In 2013, the net income was $74,014 while the operating cash flows was $264,804. In 2014, the net income was -$294,040, and the operating cash flows for that year was -$57,337. In 2015, the net income was -$888,663 with an operating cash flows of -$524,499 that same year. This shows how discrepancy between Tesla’s net income and operating cash flows has been growing smaller for the past three years. 2. Tesla’s three largest adjustments in 2015 that affect net income are other funds, funds from operations, and changes in working capital. Other funds contributed a positive cash flow of $434,860. Funds from operations contributed a negative cash flow of $31,210. Changes in capital impacted the net income negatively with a cash flow of $493,290. 3. Tesla has not made any new investments in 2015. Only business acquisitions and other uses, a decrease in other restricted cash, has made an impact in capital expenditures for Tesla that year. 4. Tesla has never paid out any dividends, according to their cash flow statements. 5. Tesla has bought back its own shares in 2011. It repurchased 15 shares, and its total dollar value of repurchase for these shares were $416.00. Vertical Analysis A. Balance Sheet The company seems to be improving over time the three year period. This can be supported by the growth in the amounts of assets of the company. If the company’s assets are increasing
- 16. from one accounting period to the other, then there a positive index in the trend. This means that the company is expanding in its operations. Most notable is the increase in the amount of property, plant and equipment. This is an in an indication that the company is expanding its operations and thus the need to purchase more assets. The total assets of a company represent the net worth of the company. If the net worth of the company is growing then the company can be said to be doing well. In the case of Tesla, the net worth of the company has grown from $2416.93 million in 2013, to $5849.251 million in 2014 and $8092.46 million in 2015. On the other hand, the company’s long term debts are growing. This means that the company is using more and more of debt financing. In most cases, this is not a good since it increases the leverage of the firm. The interest rates loaded on the debt facilities increase the company’s gearing ratio and leads to shrink in the profitability of the company. Comparing this firm with the competitor, there seems a very big difference between them. Both companies have a disparity in terms of the balance sheet figures. General Motors is bigger company and thus it shows more power. The competitor controls a larger market as show by the much assets, which means they have a larger market share. The company’s retained earnings seem to be declining. This shows that the company is not doing well in terms of the operations. VerticalAnalysis B. Income Statement According to the income statement, Tesla is not doing well. Over the three year period shown, the profitability of the company has worsened. Looking at the sales revenues of the company, it has grown is revenues over the year. Usually an increase in sales means that the company is doing well in the market. One of measure of the success of a company is the
- 17. growth in sales revenues of the company. Using this metric, we can say that the company is doing well in the market. However, despite the increase in sales revenues, the company is making more and more losses. This means that the operations of the company are not effective enough. It shows that that there are too many expenses year to year. In order for a company to be said to be performing well, it needs to grow its sales while reducing the expenditures. This is not the case with Tesla. Tesla needs to keep doing what it is doing to grow its sales and start considering ways of cutting down its expenses. In comparison to General Motors, there is a big difference in terms of sales revenues and profitability of the two companies. GM is doing very well compared to Tesla in all aspects. GM controls a larger market share, because it is a larger company and it is profitable. The failure to declare dividends to the shareholders is also an indication that the company is worsening over time. More specifically, Tesla needs to consider its selling and administration expenses. These expenses were 40.54% of sales in the 2015 compared the general Motors’ 7.57% of sales in 2015. Ratio Analysis A. Liquidity A higher current ratio indicates more liquidity, General Motors Co is doing better than TESLA Motors, because they have smaller liability. Having smaller liability means they pay off their debts faster when compared to their competitors, and that indicates that the company is more efficient. General Motors is also doing better on the quick ratio front, because in order to calculate that, one needs to take into consideration cash, short-term investments, receivables as well as current liabilities. Quick ratio, or acid-test ratio, is typically
- 18. smaller than the current ratio, and it increases according to how liquid the company is short-term. Tesla has smaller acid-test ratio when compared to General Motors, which means that they have more liabilities. However, Tesla is not doing worse than General Motors in every aspect. Tesla has smaller numbers for Days Sales Outstanding, which means they get their revenue faster than General Motors because they get paid more often and faster. Tesla has a larger number for receivable turnover, which is used to evaluate the liquidity of the capital, or accounts receivable. The higher the number, the more often receivables are collected during a set period of time, which is a positive effect on the company because it means more liquidity. When calculating the inventory turnover, one should keep in mind that it evaluates how fast the company gets rid of inventory, or in other words, how liquid the inventory is. A higher number in inventory turnover means more liquidity, which is better for the company as it means that the number of inventory sold during a particular period of time is higher compared to the competitor. Unfortunately, Tesla has a lower number in inventory turnover and a higher number in days sales inventory, respectively, as they do rely on each other. It means that General Motors sells their inventory faster than Tesla. However, Tesla’s position is still stable, since Tesla does have the advantage of gaining revenue faster than GM. Ratio Analysis B. Profitability General Motors is doing better than Tesla as one can see from analyzing their profit data. By just looking at the graph, one can immediately recognize that Tesla is doing worse, simply
- 19. because most numbers are in the negative range. However, it is this way because Tesla is a very new company, and they are investing most of their revenue into research and development, and they are predicting the profit to improve in the upcoming years. As of right now, by looking at the years 2013-2015, one can conclude that Tesla is not as efficient when it comes to showing the money made of sales produced by each dollar invested in assets, which is what the asset turnover calculates. Even though Tesla’s numbers are not in the negative range for this particular category, they are smaller than General Motors’ asset turnover, meaning even though Tesla is doing good, General Motors is doing better, which means that there is room for improvement for Tesla. The rest of the report is fairly negative, as Tesla is doing significantly worse than General Motors in every single other aspect. Negative numbers conclude that their overall profitability is lacking, and the drastic difference in numbers between Tesla’s and General Motors’ in return on assets shows that the rate of return of each dollar invested is poor, and that does not look good to the investors. The price-earning ratio has by far the most drastic difference in numbers when comparing the two companies. In the year of 2015, Tesla’s price-earning ratio was -28.95, compared to General Motors’ 5.1. Since this ratio is used to reflect investors’ assessment of a company, specifically to indicate future earnings, it is surprising to learn that Tesla has such a low number, since the company is prioritizing growth over income right now, meaning they are predicted to have improved their ROE as soon as they establish themselves in the market. It needs to be taken into consideration that Tesla is not as mature as the other large automakers, making it difficult to draw accurate comparisons between Tesla and its competitors. Tesla is also diversifying its operations, since it does not solely focus on auto-making, but also the energy storage
- 20. market[footnoteRef:2], as well as possibly spreading out to the public transportation market. All of, but specifically the energy storage market is a serious departure from the norms of the auto industry and it sets Tesla apart from its competitors. [2: "Analyzing Tesla's Return on Equity (TSLA, FCAU)." Investopedia, www.investopedia.com/articles/markets/031416/analyzing- teslas-return-equity-tsla-fcau.asp.] Ratio Analysis C. Efficiency Based up the accounts payable turnover, Tesla, generally, has a smaller amount of accounts payable than General Motors. When observing the Days Payable Outstanding ratio, it is clear that Tesla quickly and efficiently pays back its suppliers in comparison to General Motors. Having a smaller amount in accounts payable is a testament to Tesla’s ability to accurately forecast sales and production costs. However, when considering the market share of General Motors, there is likely little advantage gained by Tesla through its superior efficiency. Suppliers are likely to be interested in doing business with General Motors, regardless of their tendency to be less efficient that Tesla, because General Motors makes massive orders on supplies and represents a huge opportunity for growth. As long as General Motors is solvent, they should see little negative effect from their inefficiency. Additionally, Tesla has shown massive improvement to its efficiency over the previous three year period, which indicates positive results in the future. Ratio Analysis
- 21. D. Solvency Other than a sudden increase in the debt to total assets category, Tesla appears to be relatively on par with General Motors in this particular instance. The sudden increase, which appears in 2014, in debt to total assets is likely because Tesla is a relatively new company. Tesla’s assets and debts, which mostly consist of loans procured for the expansion of infrastructure, cause Tesla’s overall financial position to change wildly over the course of each year. On the other hand, General Motors, which is an older, more established company, has consistency in its operations, and does not need to invest in new infrastructure at anywhere near the same rate Tesla does. The Times interest Earned ratio is particularly condemning for Tesla. Tesla is funneling massive amounts of capital into research and development and infrastructure. As a result, Tesla has compromised its overall financial position. A negative Times interest Earned ratio is indicative of the fact that Tesla’s current revenue is too small for the company to pay it the interest on its current debts. Tesla’s ability to remain solvent in the future is dependent upon the successful launch of its new cars, the model X and model 3. Revenues from both models will need to be large enough to ensure Tesla gains the ability to begin paying the interest on its debt and securing a more stable financial position. General Motors 2013 2014 2015 2013 vs 2014 2014 vs 2015 Average Current Assets
- 22. $81,501.00 $83,670.00 $78,007.00 2.66% -6.77% -2.05% Noncurrent Assets $84,843.00 $94,007.00 $116,513.00 10.80% 23.94% 17.37% Total Assets $166,344.00 $177,677.00 $194,520.00 6.81% 9.48% 8.15% Current Liabilities $62,412.00 $65,701.00 $71,466.00 5.27% 8.77% 7.02% Noncurrent Liabilities $60,758.00 $75,952.00 $82,731.00 25.01% 8.93% 16.97% Total Liabilities $123,170.00
- 23. $141,653.00 $154,197.00 15.01% 8.86% 11.93% Total Stockholder's Equity $42,607.00 $35,457.00 $39,871.00 -16.78% 12.45% -2.17% Tesla 2013 2014 2015 2013 vs 2014 2014 vs 2015 Average Net Sales/ Sales Revenue $2,013.50 $3,198.36 $4,046.03 58.85% 26.50% 42.68% COGS $1,451.15 $2,084.75 $2,699.93 43.66% 29.51% 36.58% Gross Profit $562.35 $1,113.60
- 24. $1,346.09 98.03% 20.88% 59.46% Selling, General & Administrative $517.55 $1,068.36 $1,640.13 106.43% 53.52% 79.98% Advertising $9.00 $48.90 $58.30 443.33% 19.22% 231.28% Depreciation & Amortization $106.08 $231.93 $422.59 118.63% 82.21% 100.42% Rent Expense $21.50 $46.30 $68.20 115.35% 47.30% 81.33% Other Expenses 1120.919 2596.011 5194.737
- 25. 131.60% 100.10% 115.85% Total Expenses 1775.047 3991.502 7383.959 124,87% 85.00% 104.94% Operating Income / Earnings before ($61.28) ($186.69) ($716.63) -204.63% -283.86% -244.25% Tax Expense $12.73 $107.35 $172.03 743.23% 60.25% 401.74% Net Income ($74.01) ($294.04) ($888.66) -297.28% -202.23% -249.76% General Motors 2013 2014 2015 2013 vs 2014
- 26. 2014 vs 2015 Average Net Sales/ Sales Revenue 155427 155929 152356 0.32% -2.29% -0.99% COGS 130909 131657 123800 0.57% -5.97% -2.70% Gross Profit 24518 24272 28556 -1.00% 17.65% 8.33% Selling, General & Administrative 11910 11756 11530 -1.29% -1.92% -1.61% Advertising 5500 5200 5100 -5.45% -1.92%
- 27. -3.69% Depreciation & Amortization 5908 6238 7219 5.59% 15.73% 10.66% Rent Expense 477 444 357 -6.92% -19.59% -13.26% Other Expenses 29250 34803 51401 18.98% 47.69% 33.34% Total Expenses 53,045 58,441 75,607 10.17% 29.37% 19.77% Operating Income / Earnings before 6700 6278 9807 -6.30% 56.21% 24.96%
- 28. Tax Expense 1354 2329 120 72.00% -94.85% -11.43% Net Income 5346 3949 9687 -26.13% 145.30% 59.59% Tesla 2013 2014 2015 2013 vs 2014 2014 vs 2015 Average Operating Cash Flows 257.94 -57.337 -524.499 -122.23% 814.77% 346.27% Investing Cash Flows -249.217 -990.444 -1673.551 297.42% 68.97% 183.20% Financing Cash Flows
- 29. 635.422 2143.13 1523.523 237.28% -28.91% 104.18% General Motors 2013 2014 2015 2013 vs 2014 2014 vs 2015 Average Operating Cash Flows 12630 10058 11978 -20.36% 19.09% -0.64% Investing Cash Flows -14362 -15698 -28035 9.30% 78.59% 43.95% Financing Cash Flows 3731 5675 13686 52.10% 141.16% 96.63% Tesla201520142013 Cash & Cash Equivalents 35.12%32.89%15.07%
- 30. Accounts Receivable 2.03%3.87%2.09% Inventory 14.08%16.30%15.79% Total Current Assets 52.38%54.68%34.50% PP&E 46.38%44.38%64.19% Intangible Assets 0.58%0.00%0.00% Total Assets 100.00%100.00%100.00% Accounts Payable 17.37%15.94%13.16% Total Current Liabilities 38.58%43.19%40.46% Total Long-term Liabilities 34.23%37.28%29.31% Total Liabilities 100.00%100.00%100.00% Retained Earnings -170.83%-147.82%-205.67% Total Stockholders’ Equity 100.00%100.00%100.01% General Motors201520142013 Cash & Cash Equivalents 12.85%16.61%18.18% Accounts Receivable 13.57%14.41%13.71% Inventory 7.08%7.68%8.44% Total Current Assets 40.10%47.09%49.00% PP&E 26.42%19.59%17.58% Intangible Assets 3.06%3.61%4.35% Total Assets 100.00%100.00%100.00% Accounts Payable 15.60%15.90%19.18% Total Current Liabilities 46.35%46.38%50.67% Total Long-term Liabilities 22.39%22.49%17.88% Total Liabilities 100.00%100.00%100.00% Retained Earnings 6.30%3.66%6.43% Total Stockholders’ Equity 100.00%100.00%100.00% Tesla201520142013 Sales (Revenues) 100.00%100.00%100.00% Cost of Goods Sold 66.73%65.18%72.07% Selling, General & Administrative Expenses 40.54%33.40%25.70% Operating Income -7.27%1.41%2.22% Net Income -21.96%-9.19%-3.68% Dividends per Share 0.00%0.00%0.00% General Motors201520142013
- 31. Sales (Revenues) 100.00%100.00%100.00% Cost of Goods Sold 81.26%84.43%84.22% Selling, General & Administrative Expenses 7.57%7.54%7.66% Operating Income 11.18%8.03%8.11% Net Income 6.36%2.53%3.44% Dividends per Share 0.00%0.00%0.00% Tesla201520142013 Current 4.415.23160.16 Quick2.193.52113.61 Receivable Turnover20.4614.1141.00 Days Sales Outstanding17.8425.868.90 Inventory Turnover2.423.224.77 Days Sales in Inventory150.84113.2876.57 General Motors 2015 2014 2013 Current 9.94 11.85 11.75 Quick 2.82 3.68 3.75 Receivable Turnover 5.46 6.09 6.81 Days Sales Outstanding 66.90 59.94 53.57 Inventory Turnover
- 32. 9.03 9.51 9.11 Days Sales in Inventory 40.40 38.37 40.08 Tesla 2015 2014 2013 Profit Margin -0.22 -0.09 -0.04 Asset Turnover 0.58 0.77 1.14 Return on Assets -0.13 -0.07 -0.04 Return on Stockholder's Equity -0.85 -0.36 -0.19 Earnings per share -6.91 -2.36 -0.62 Price-earnings ratio 0.05 0.15 0.58 Payout ratio
- 33. 0 0 0 General Motors 2015 2014 2013 Profit Margin 0.06 0.03 0.03 Asset Turnover 0.82 0.91 0.98 Return on Assets 0.05 0.02 0.03 Return on Stockholder's Equity 0.26 0.10 0.14 Earnings per share 6.25 2.55 3.73 Price-earnings ratio 0.02 0.04 0.03 Payout ratio 0.23 0.80 0.32 Tesla
- 34. 2015 2014 2013 Accounts Payable Turnover 3.19 3.85 4.78 Days Payable Outstanding 0.009 0.011 0.013 General Motors 2015 2014 2013 Accounts Payable Turnover 5.31 5.71 5.37 Days Payable Outstanding 0.015 0.016 0.015 Tesla 2015 2014 2013 Debt-to-Total Assets 0.33 0.42 0.25 Times Interest Earned -4.47 -1.64 -3.06 General Motors
- 35. 2015 2014 2013 Debt-to-Total Assets 0.32 0.26 0.22 Times Interest Earned 4.54 3.31 5.93 Tesla 2013 2014 2015 2013 vs 2014 2014 vs 2015 Average Current Assets $1,265.94 $3,198.66 $2,791.57 152.67% -12.73% 69.97% Noncurrent Assets $1,150.99 $2,650.59 $5,300.89 130.29% 99.99% 115.14% Total Assets $2,416.93 $5,849.25 $8,092.46
- 36. 142.01% 38.35% 90.18% Current Liabilities $675.16 $2,107.17 $2,816.27 212.10% 33.65% 122.88% Noncurrent Liabilities $1,074.65 $2,772.18 $4,145.20 157.96% 49.53% 103.74% Total Liabilities $1,749.81 $4,879.35 $6,961.47 178.85% 42.67% 110.76% Total Stockholder's Equity $667.12 $969.91 $1,130.99 45.39% 16.61% 31.00% Financial Analysis Project PART FOUR – DISCUSSION & ANALYSIS 1. THE NEAR FUTURE Refer back to your STOCK PRICE LOG (page 8). Determine the
- 37. buy-and-hold return of your company’s stock, its competitor & for the Dow Jones Industrial Average* in the same period (September 16 to November 25, 2016). *You can find Dow Jones performance on “finance.google.com” or “finance.yahoo.com” Calculate the return simply as follows (ignoring any dividend payments, and present it in percentage): (Price on Nov 25- Price on Sept 16)/ Price on Sept 16 = Buy- and-Hold Return COMPANY:_______________ COMPETITOR:______________ DOW JONES:______________ Did the company outperform its competitor? Did it outperform the Dow Jones? After tracking the stock price for the last 11 weeks for this Financial Analysis Project in addition to the last 60 months for the Information Systems Deliverable and using the calculations you performed above, you have an idea about the price and return of your company’s stock. Using this information along with your assessment of the company’s financial performance as judged by cash flow, revenues, operating income, new products and all your other information, make a short-term prediction for your company. Short-term prediction reflects your prediction of the company in one year, i.e. “We expect this company to be performing better or worse and why?” The “why” needs to be in detail and supported using the results of the Horizontal Analysis and the Ratio Analysis. The comments should be about ONE- HALF to ONE page. **Attach a copy of the Scatter Plot (with text) you completed for Information Systems to the end of this project. 2. LONG-TERMPREDICTIONS&FINALOBSERVATIONS Long-term prediction reflects your prediction of the company in 2-5 years. Your long term response ... “In 2-5 years we expect this company to be performing better or worse and why?” On the whole, how has it done and how do you think it will perform in the future, in terms of earnings, cash flows, and any other metric you deem important, such as product innovations, etc.? This part needs to be at least three substantive paragraphs, and
- 38. it should draw together all the analysis from the other steps. The comments should be about TWO pages.