Question

Selected balance sheet, income statement and cash flow statement information from Tesla, Inc. for 2017 and 2016 follows ($ thousands).

December 31	2017	2016
Cash and cash equivalents	$3,701,247	$3,726,549
Restricted cash	156,545	106,741
Net receivables	515,381	499,142
Inventory	2,263,537	2,067,454
Other current assets	268,365	194,465
Current assets	6,905,075	6,594,351
Current liabilities	7,674,670	5,827,005
Total liabilities	23,022,980	16,750,167
Stockholders' equity	5,965,725	6,247,242

Year ended December 31,	2017
Loss before income taxes	$(2,209,032)
Interest expense	504,592
Cash flows from operating activities	(59,432)
Capital expenditures	(3,748,147)

a. Compute the current ratio and quick ratio for each year.

Note: Round answers to two decimal places.

	2017	2016
Current ratio	Answer	Answer
Quick ratio	Answer	Answer

b. Compute the debt-to-equity ratio for 2017 and 2016 and the times-interest-earned ratio for 2017.

Note: Round answers to two decimal places. Use a negative sign with your answer, if appropriate.

	2017	2016
Debt-to-equity ratio	Answer	Answer
Times interest earned ratio	Answer

c. Compute the cash burn rate for 2017.

Note: Round answer to the nearest whole number. Use a negative sign with your answer, if appropriate.

$Answer

  thousand per day

Answer 1

a) Compute Current ratio: Current Assets Current ratio (2016) = Current liabilities $6594351 $5827005 1.13:1 Current Assets Current ratio (2017) =- Current li abilities $6,905,075 S7, 674, 670 0.89:1 Compute Quick ratio:

Cash + Netreceivable Quick ratio (2016) =. Current liabilities $3,726,549+$499,142 %3D $5827005 $4225691 $5827005 0.72:1 Cash + Netreceivable Quick ratio (2017)=- Current liabilities $3,701,247+$515,381 $7,674,670 S6,905,075 S7,674,670 =0.55:1 b)

Compute debt to equity ratio: Total Liabilities Debt to equity (2016) = Stockholders'Equity $16,750,167 $6,247,242 =2.68:1 Total Liabilities Debt to equity (2017) = Stockholders'Equity $23,022,980 $5,965, 725 3.86:1 Compute times interest earmed ratio: Earning beforeinterest andincometax Times interest ratio (2017): Interest expense In 2017 Loss before income taxes S(2,209,032). Therefore no ratio computed.

Compute cash burn rate for 2017 as follows: Opening cash balance-Closing cash balance Cash burn rate = Months $3,726,549 - $3,701,247 12 =$2,108