question archive Compute and Interpret Liquidity and Solvency Ratios Selected balance sheet, income statement and cash flow statement information from Tesla, Inc
Compute and Interpret Liquidity and Solvency Ratios Selected balance sheet, income statement and cash flow statement information from Tesla, Inc
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Compute and Interpret Liquidity and Solvency Ratios
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 $3,367,914 $3,393,216
Restricted cash 155,323 105,519
Net receivables 515,381 499,142
Inventory 2,263,537 2,067,454
Other current assets 268,365 194,465
Current assets 6,570,520 6,259,796
Current liabilities 7,674,670 5,827,005
Total liabilities 23,022,980 16,750,167
Stockholders' equity 5,632,392 5,913,909
Year ended December 31, 2017
Loss before income taxes $(2,209,032)
Interest expense 471,259
Cash flows from operating activities (60,654)
Capital expenditures (3,414,814)
a. Compute the current ratio and quick ratio for each year.
Note: Round answers to two decimal places.
2017 2016
Current ratio ? ?
Quick ratio ? ?
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 ? ?
Times interest earned ratio ? -
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.
$ ? thousand per day
Previous answers that were Not correct are
Current Ratio 1.69 2.13
Quick Ratio 1.39 1.77
Debt to Equity Ratio 5.45 3.82
Time Interest Earned -0.13
Cash Burn Rate $96537.5
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|
2017 |
2016 |
|
| a. Current ratio |
0.86 |
1.07 |
| Quick ratio |
0.53 |
0.69 |
| b. Debt-to equity ratio |
4.09 |
2.83 |
| Times interest earned ratio |
-4.69 |
|
| c. Cash burn rate per day |
$67 |
Step-by-step explanation
| 2017 | 2016 | |
| Current assets | $6,570,520 | $6,259,796 |
| Divided by: Current liabilities | 7,674,670 | 5,827,005 |
| a. Current ratio |
0.86 |
1.07 |
| 2017 | 2016 | |
| Cash and cash equivalents | $3,367,914 | $3,393,216 |
| Restricted cash | 155,323 | 105,519 |
| Net receivables | 515,381 | 499,142 |
| Quick assets | $4,038,618 | $3,997,877 |
| Divided by: Current liabilities | 7,674,670 | 5,827,005 |
| a. Quick ratio |
0.53 |
0.69 |
| 2017 | 2016 | |
| Total liabilities | $23,022,980 | $16,750,167 |
| Divided by: Stockholders' equity | 5,632,392 | 5,913,909 |
| b. Debt-to equity ratio |
4.09 |
2.83 |
| Loss before income taxes | ($2,209,032) |
| Divided by: Interest expense | 471,259 |
| b. Times interest earned ratio |
-4.69 |
| Cash, December 31, 2017 | ||
| Cash and cash equivalents | $3,367,914 | |
| Restricted cash | 155,323 | $3,523,237 |
| Less: Cash, December 31, 2016 | ||
| Cash and cash equivalents | $3,393,216 | |
| Restricted cash | 105,519 | 3,498,735 |
| Net cash flow | $24,502 | |
| Divided by: | 365 | |
| c. Cash burn rate per day |
$67 |
