Tesla’s cash flow – terrible or horrendous?

My thinking on this has evolved, hence an update.

Let’s look at it from a 2016 perspective:

-1.4 billion right

Screenshot 2017-10-29 00.59.13

this is the classic version and is derives as operating cash flow(-123.8) + capex(-1280.8)

But there are many interpretations from reputable sources including Telsa’s statement perhaps:

guru focus has 2016 Tesla free cash flow as -1,564.3

Screenshot 2017-10-29 01.04.41

And the WSJ.com, America’s financial paper on record agrees and calculates Tesla’s free cash flow as -1.56 billion dollars.

Screenshot 2017-10-29 01.10.15

and Morningstar.com

Screenshot 2017-10-29 01.13.29

So these seem all to be in agreement.

Then I found the below  ago more or less.

 

Screenshot 2017-10-29 02.41.54

or in more detail

Screenshot 2017-10-29 02.52.06.png

and this is what it gave me.

-9,171,829,938.10 (-9 BILLION DOLLARS) based on one calc. but could that be really possible?

Well, perhaps another way is to consider therefore what the company has had to say about fix assets period since the only thing that really seems to be unconventional about about the different interpretations of Free cash flow is this idea of fixed assets.

 

Screenshot 2017-10-29 03.01.46

 

SEC:”We also note that you have not generated positive operating cash flow in the last two
fiscal years.
In light of your disclosure that you anticipate significant capital
expenditures, please expand your discussion to disclose your plan to finance those
expenditures and your operations.”

 

Please tell us the nature of amounts classified as fixed asset disposal and why the
presentation of these amounts as operating cash flows is appropriate.”Screenshot 2017-10-29 03.09.51

AND TELSA’S RESPONSE WAS: …the loss from the fixed asset disposal was added back as non-cash reconciling item as part of the cash flows used in operating activities…in future filings…the Company will retitle “fixed asset disposal” to “loss on fixed asset disposal” for additional clarity. 

Tesla it seemed added back losses from fixed asset disposal to its non cash operating activities?

now why would they do that ?

Obviously, the remedy to reclassify meant that the statements were not fitting the narrative.

Tesla is all about the narrative since they generate no profits but continually invest.

https://www.accountingcoach.com/cash-flow-statement/explanation/8

Screenshot 2017-10-29 03.18.20

Tesla, it seemed had a loss…the disposal of the asset though meant that it had depreciated it below the price they sold it, necessitating a positive cash flow from the statement point of view. Seems a bit arcane accounting speak and not a red flag in and of itself. But interesting nonetheless.

 

Where else might we see fixed assets in Tesla’s filings?

In its lease agreements, such as the one it had done with US bank in October 25th of 2014.

Screenshot 2017-10-29 03.22.28.png

and this it seems is how their arrangement on the leases had gone until march of 2016.

 

Screenshot 2017-10-29 03.25.18.png44 million in equity for cover 423 million dollars in total assets. but besides the minority amount for fixed assets, $5.1 million dollars, not much to see outside of the leverage perhaps.

nothing untoward. But perhaps that is all overly complicated.

It seems what New constructs is generically pointing to is Tesla’s balance sheet explsion.

 

total assets change from 2015 to 2016: assets +14 billion

22,664.1 8,067.9

total liabilities from 2015 to 2016 liabilities +10 billion

16,750.2 6,937.0

as the SEC pointed out how is it that Tesla, which loses money, expect to grow its balance sheet to be a major….well we know, credit lines, capital infusions of equity, and debt, payables explosion… is all of that not invested capital in one form or another… i will leave with the last visualization.

 

Screenshot 2017-10-29 03.47.29.png

… does Tesla even know what their cash needs even are?

I have looked at the transcripts and listened to Elon Musk’s bull chit. I suppose the market will know soon enough just how much more cash Tesla will need pretty soon.

As for the question that I lead with this article…is Tesla’s cash flow horrendous or terrible… the words mean the same thing…its both horrendous, terrible, and terrifying.

 

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