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I’m working on a finance multi-part question and need a sample draft to help me learn.

Part I: Write a journal discussing risk and return as it relates to investing in stocks.

Part II: In this project, you will demonstrate your mastery of the following competencies:

Analyze financial and investment decisions that add value to the organization

Analyze financing options to maximize investor value

6/9/22, 8:27 PM
Module Six Journal Guidelines and Rubric – FIN-320-X5083 Principles of Finance 22EW5
FIN-320-X5083 Principles of Finance 22EW5
SB
Module Six Journal Guidelines and Rubric
î±­

Overview
Risk and return go hand in hand. Understanding this relationship is critical to making well-reasoned financial decisions, whether you
are making personal investment decisions or working for a business where you’re responsible for investing excess cash. This journal
assignment allows you to explore the risk-return relationship in the context of investing in stocks in both of these roles.
Prompt
Write a journal discussing risk and return as it relates to investing in stocks.
Specifically, you must address the following rubric criteria:
Investment Risk: Explain key risks associated with investing in stocks.
Investment Return: Discuss events that can cause the price of a stock to increase or decrease.
Risk-Return Relationship: Explain the relationship between risk and return and how this relationship impacts stock
investment decisions, using examples to support your claims.
Reflection: Describe whether you make stock-investment decisions in your personal life and how you do or would make
those decisions.
Consider the following in your response: Would your decision-making process change if you needed to make stockinvestment decisions for a business? Why or why not?
Guidelines for Submission
Your submission must be a 4- to 5-paragraph Word document with 12-point Times New Roman font, double spacing, and one-inch
margins. Sources should be cited according to APA style.
Module Six Journal Rubric
Criteria
Proficient (100%)
Needs Improvement (70%)
Not Complete (0%)
Value
Investment Risk
Explains key risks associated
with investing in stocks
Shows progress toward
proficiency, but with errors
or omissions; areas for
improvement may include
explaining in more detail the
key risks associated with
investing in stocks
Does not attempt criterion
21
Investment Return
Discusses events that can
cause the price of a stock to
increase or decrease
Shows progress toward
proficiency, but with errors
or omissions; areas for
improvement may include
discussing in more detail the
events that can cause the
price of a stock to increase
Does not attempt criterion
21
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Module Six Journal Guidelines and Rubric – FIN-320-X5083 Principles of Finance 22EW5
or decrease
Risk-Return
Relationship
Explains the relationship
between risk and return and
Shows progress toward
proficiency, but with errors
how this relationship impacts
or omissions; areas for
stock investment decisions,
improvement may include
using examples to support
claims
explaining in more detail the
relationship between risk
Does not attempt criterion
22
Does not attempt criterion
21
10
and return and how this
relationship impacts stock
investment decisions or
using better examples to
support claims
Reflection
Describes whether the
Shows progress toward
student makes stockinvestment decisions in their
proficiency, but with errors
or omissions; areas for
personal life and how they
improvement may include
do or would make those
decisions
describing in more detail
whether the student makes
stock-investment decisions
in their personal life and how
they do or would make those
decisions
Articulation of
Clearly conveys meaning
Shows progress toward
Submission has critical errors
Response
with correct grammar,
proficiency, but with errors
in grammar, sentence
sentence structure, and
in grammar, sentence
structure, and spelling,
spelling, demonstrating an
understanding of audience
structure, and spelling,
negatively impacting
preventing understanding of
ideas
and purpose
readability
Citations and
Uses citations for ideas
Uses citations for ideas
Does not use citations for
Attributions
requiring attribution, with
requiring attribution, with
ideas requiring attribution
few to no minor errors
major errors
Total:
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5
100%
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Project Two Guidelines and Rubric – FIN-320-X5083 Principles of Finance 22EW5
FIN-320-X5083 Principles of Finance 22EW5
SB
Project Two Guidelines and Rubric
î±­

Competencies
In this project, you will demonstrate your mastery of the following competencies:
Analyze financial and investment decisions that add value to the organization
Analyze financing options to maximize investor value
Scenario
You are a financial analyst for the chosen business that you selected during your Module Two Journal assignment. Your supervisor
has discovered last minute that your business’s board of directors is looking for updates on the business’s financial health. Your
supervisor has asked you to write a report regarding the business’s current financial health and the available financial options for
improving the business. You’ve also been asked to make recommendations as to which options the business should choose to best
support its financial health. Your supervisor will then use your report to present to the business’s board of directors, whose
members all have varying levels of knowledge in terms of finance.
Directions
Using the business you chose from the Project Two Business Options List, create a report for your supervisor to share with the
board of directors during their presentation. Keep in mind that your report needs to be easy for someone unfamiliar with finance to
understand, as not all of the board members for your business fully understand finance.
Using Mergent Online, locate the most recent quarterly financial statements for your chosen company, and use these statements to
support your analysis throughout the project. Refer to the Project Two Financial Assumptions document located in the Supporting
Materials section for the assumptions you need in order to analyze the three available financial options outlined in the Financial
Analysis section of the project directions.
You are encouraged to use the Project Two Financial Analyst Report template located in the What to Submit section to help
complete this project.
Specifically, you must address the following:
1. Financial Analysis: In this section of the report, you will use the most recent quarterly financial statements for your chosen
business and the Project Two Financial Formulas spreadsheet (located in the What to Submit section) to calculate
appropriate financial formulas for assessing the business’s financial health. You will also analyze all three available financial
options for improving the business based on your calculations and the provided Project Two Financial Assumptions
document.
A. Financial Calculations: Calculate accurate financial formulas to assess the business’s current financial health.
Specifically, you must calculate the following:
Working capital
Current ratio
Debt ratio
Earnings per share
Price/earnings ratio
Total asset turnover ratio
Financial leverage
N t
fit
i
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Net profit margin
Return on assets
Return on equity
B. Working Capital Management: Explain the impact of working capital management on the business’s operations.
Provide examples to support your claims.
C. Bond Investment: Analyze the risks and benefits of the business choosing to invest in a corporate bond, including
the necessary ethical considerations, appropriate calculations, and examples to support your analysis.
D. Capital Equipment: Analyze the risks and benefits of the business choosing to invest in capital equipment, including
the necessary ethical considerations, appropriate calculations, and examples to support your analysis.
E. Capital Lease: Analyze the risks and benefits of the business choosing to purchase a capital lease, including the
necessary ethical considerations, appropriate calculations, and examples to support your analysis.
2. Financial Evaluation: In this section of the report, you will now determine if the three available financial options in the
Project Two Financial Assumptions document are appropriate for the business, considering the analysis you did in the first
section. You will also explain financing and describe the business’s likely future performance.
A. Financing: Explain how a business finances its operations and expansion.
B. Bond Investment: Assess the appropriateness of a bond investment as a financing option for the business’s financial
health, using your financial analysis and other financial information to your support claims.
C. Capital Equipment: Assess the appropriateness of a capital equipment investment as a financing option for the
business’s financial health, using your financial analysis and other financial information to support your claims.
D. Capital Lease: Assess the appropriateness of a capital lease purchase as a financing option for the business’s financial
health, using your financial analysis and other financial information to support your claims.
E. Short-Term Financing: Explain how potential short-term financing sources could help the business raise needed
funds for improving its financial health. Base your response on the business’s current financial information.
F. Future Financial Considerations: Describe the business’s likely future financial performance based on its current
financial well-being and risk levels. Use financial information to support your claims.
3. Financial Recommendations: In this section of the report, you will recommend which financing option(s) are the best for the
business to choose depending on its financial health.
A. Financial Recommendation(s): Recommend the most appropriate financing option(s) based on the business’s financial
health, including a rationale for why the option(s) are best.
What to Submit
To complete this project, you must submit the following:
Financial Analysis Report
Submit your completed report as a 3- to 5-page Word document with 12-point Times New Roman font, double spacing, and oneinch margins. Or, you may use the provided Project Two Financial Analyst Report Word Document template if you so choose to help
you complete your report.
You will also need to submit the Excel files for your chosen business’s balance sheet, income statement, and cash flow statement
from Mergent Online.
Spreadsheet: Project Two Financial Formulas Spreadsheet
Use this Excel spreadsheet to complete your calculations for the project. You should have already completed parts of the
spreadsheet for your Project Two Milestone assignment.
All sources, including your Project Two Financial Formulas spreadsheet, should be cited according to APA style.
Supporting Materials
The following resources support your work on the project:
Document: Project Two Financial Assumptions PDF
Use this document to help you complete this project.
Document: Project Two Business Options List PDF
Use this document to select your chosen business for this project.
Shapiro Library Resource: Mergent Online
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Shapiro Library Resource: Mergent Online
Use this resource to help you complete this project.
Video: Mergent Online: Public Company Financials (4:46)
Watch this video from the Shapiro Library to learn more about how to access and use Mergent Online. Although this video shows
information on the ‘As Reported Currency’ page within the Company Financials tab, for the purposes of this course, the best option
for locating financial data can be accessed by clicking on ‘Standardized’ beneath the ‘Company Financials’ tab. This will allow you to
access the Standardized Annual Balance Sheet.
Shapiro Library FAQ: How Do I Cite a Company Profile From Mergent Online?
Use this resource to help answer any questions you have about citing from Mergent Online.
Project Two Rubric
Criteria
Financial Analysis:
Exemplary
N/A
Financial
Calculations
Proficient
Needs Improvement
Not Evident
Calculates accurate
Shows progress
Does not attempt
financial formulas to
assess the business’s
toward proficiency,
but with errors or
criterion (0%)
current financial
omissions; areas for
health (100%)
improvement may
Value
6
include calculating
more accurate
financial formulas to
assess the business’s
current financial
health (55%)
Financial Analysis:
Exceeds proficiency
Explains the impact
Shows progress
Does not attempt
Working Capital
in an exceptionally
of working capital
toward proficiency,
criterion (0%)
Management
clear, insightful,
sophisticated, or
management on the
business’s
but with errors or
omissions; areas for
creative manner
operations, providing
improvement may
(100%)
examples to support
include explaining in
the claims (85%)
further detail the
6
impact of working
capital management
on the business’s
operations or the
examples provided
to support the claims
(55%)
Financial Analysis:
Bond Investment
Exceeds proficiency
in an exceptionally
clear, insightful,
sophisticated, or
creative manner
(100%)
Analyzes the risks
and benefits of the
business choosing to
invest in a bond,
including the
necessary ethical
considerations,
appropriate
calculations, and
examples to support
the analysis (85%)
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Shows progress
toward proficiency,
but with errors or
omissions; areas for
improvement may
include analyzing
more
comprehensively the
risks and benefits of
the business
choosing to invest in
a bond, including the
necessary ethical
considerations,
appropriate
Does not attempt
criterion (0%)
8
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Project Two Guidelines and Rubric – FIN-320-X5083 Principles of Finance 22EW5
calculations, and
examples to support
the analysis (55%)
Financial Analysis:
Capital Equipment
Exceeds proficiency
in an exceptionally
Analyzes the risks
and benefits of the
Shows progress
toward proficiency,
clear, insightful,
sophisticated, or
creative manner
business choosing to
invest in capital
equipment, including
but with errors or
omissions; areas for
improvement may
(100%)
the necessary ethical
considerations,
include analyzing
more
appropriate
calculations, and
comprehensively the
risks and benefits of
examples to support
the analysis (85%)
the business
choosing to invest in
capital equipment,
Does not attempt
criterion (0%)
8
Does not attempt
criterion (0%)
8
Does not attempt
criterion (0%)
7
including the
necessary ethical
considerations,
appropriate
calculations, and
examples to support
the analysis (55%)
Financial Analysis:
Capital Lease
Exceeds proficiency
in an exceptionally
Analyzes the risks
and benefits of the
Shows progress
toward proficiency,
clear, insightful,
sophisticated, or
creative manner
business choosing to
purchase a capital
lease, including the
but with errors or
omissions; areas for
improvement may
(100%)
necessary ethical
considerations,
include analyzing
more
appropriate
calculations, and
comprehensively the
risks and benefits of
examples to support
the analysis (85%)
the business
choosing to purchase
a capital lease,
including the
necessary ethical
considerations,
appropriate
calculations, and
examples to support
the analysis (55%)
Financial
Evaluation:
Exceeds proficiency
in an exceptionally
Explains how a
business finances its
Shows progress
toward proficiency,
Financing
clear, insightful,
sophisticated, or
creative manner
operations and
expansion (85%)
but with errors or
omissions; areas for
improvement may
(100%)
include explaining in
more detail how a
business finances its
operations and
expansion (55%)
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Financial
Evaluation: Bond
Investment
Project Two Guidelines and Rubric – FIN-320-X5083 Principles of Finance 22EW5
Exceeds proficiency
in an exceptionally
Assesses the
appropriateness of a
Shows progress
toward proficiency,
clear, insightful,
sophisticated, or
bond investment as a
financing option for
but with errors or
omissions; areas for
creative manner
(100%)
the business’s
financial health,
using financial
improvement may
include assessing
more
analysis and other
financial information
comprehensively the
appropriateness of a
to support the claims
(85%)
bond investment as a
financing option for
the business’s
Does not attempt
criterion (0%)
8
8
financial health or
better using financial
analysis and other
financial information
to support the claims
(55%)
Financial
Exceeds proficiency
Assesses the
Shows progress
Does not attempt
Evaluation: Capital
Equipment
in an exceptionally
clear, insightful,
appropriateness of a
capital equipment
toward proficiency,
but with errors or
criterion (0%)
sophisticated, or
creative manner
(100%)
investment as a
financing option for
the business’s
omissions; areas for
improvement may
include assessing
financial health,
using financial
more
comprehensively the
analysis and other
financial information
appropriateness of a
capital equipment
to support the claims
(85%)
investment as a
financing option for
the business’s
financial health or
better using financial
analysis and other
financial information
to support the claims
(55%)
Financial
Exceeds proficiency
Assesses the
Shows progress
Does not attempt
Evaluation: Capital
Lease
in an exceptionally
clear, insightful,
appropriateness of a
capital lease
toward proficiency,
but with errors or
criterion (0%)
sophisticated, or
creative manner
(100%)
purchase as a
financing option for
the business’s
omissions; areas for
improvement may
include assessing
financial health,
using financial
more
comprehensively the
analysis and other
financial information
appropriateness of a
capital lease
to support the claims
(85%)
purchase as a
financing option for
the business’s
8
financial health or
better using financial
analysis and other
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y
financial information
to support the claims
(55%)
Financial
Exceeds proficiency
Explains how
Shows progress
Does not attempt
Evaluation: ShortTerm Financing
in an exceptionally
clear, insightful,
potential short-term
financing sources
toward proficiency,
but with errors or
criterion (0%)
sophisticated, or
creative manner
(100%)
could help the
business raise
needed funds for
omissions; areas for
improvement may
include explaining in
improving its
financial health,
further detail how
potential short-term
based on the
business’s current
financing sources
could help the
financial information
(85%)
business raise
needed funds for
improving its
7
financial health,
based on the
business’s current
financial information
(55%)
Financial
Evaluation: Future
Financial
Considerations
Exceeds proficiency
in an exceptionally
Describes the
business’s likely
Shows progress
toward proficiency,
clear, insightful,
sophisticated, or
creative manner
future financial
performance based
on its current
but with errors or
omissions; areas for
improvement may
(100%)
financial well-being
and risk levels (85%)
include describing in
further detail the
Does not attempt
criterion (0%)
6
7
business’s likely
future financial
performance based
on its current
financial well-being
and risk levels (55%)
Exceeds proficiency
Recommends the
Shows progress
Does not attempt
Recommendation(s) in an exceptionally
clear, insightful,
sophisticated, or
Financial
most appropriate
financing option(s)
based on the
toward proficiency,
but with errors or
omissions; areas for
criterion (0%)
business’s financial
health, including a
rationale for why the
improvement may
include
recommending more
option(s) are best
comprehensively the
(85%)
most appropriate
creative manner
(100%)
financing option(s)
based on the
business’s financial
health, including a
rationale for why the
option(s) are best
(55%)
Articulation of
Exceeds proficiency
Clearly conveys
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Submission has
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Response
Project Two Guidelines and Rubric – FIN-320-X5083 Principles of Finance 22EW5
in an exceptionally
meaning with correct
toward proficiency,
critical errors in
clear, insightful,
grammar, sentence
but with errors in
grammar, sentence
sophisticated, or
creative manner
structure, and
spelling,
grammar, sentence
structure, and
structure, and
spelling, preventing
(100%)
demonstrating an
spelling, negatively
understanding of
understanding of
audience and
impacting readability
(55%)
ideas (0%)
purpose (85%)
Citations and
Attributions
Uses citations for
ideas requiring
Uses citations for
ideas requiring
Uses citations for
ideas requiring
Does not use
citations for ideas
attribution, with few
attribution, with
attribution, with
requiring attribution
or no minor errors
consistent minor
major errors (55%)
(0%)
(100%)
errors (85%)
Total:
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100%
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1
TESLA’s Financial Health
Stacy Blaise
SNHU
FIN 320
5 June 2022
TESLA’s Financial Health
2
Part 2: Tesla’s Financial Ratios
Income Statement
Source-Tesla
Statement of cashflows
Source-Tesla
3
For TESLA, the financial ratios that are going to be put into consideration are shown
in the table below.
Ratio and Formula
Working
Outcome
Analysis
Current ratio (current
66,038/30, 632
2.1558
It is auspicious for TESLA
assets/current
that the current assets exceed
Liabilities)
current liabilities (Perkins &
Murmann, 2018).
Working Capital
66,038 – 30,632
35406
The excess in assets provides
(Current Assets –
the company with good
Current Liabilities)
leverage for operations
Debt Ratio (Total
30,632/66,038
0.4638
TESLA is healthy when the
Liabilities/Total
debt ratio is not 1.0 and is
Assets)
still in the zero range.
Earnings Per Share
3280/1034
3.1721
The EPS of Tesla is
(Net Income /
handsome for any stakeholder
Weighted Average
and will keep them at bay
Common Shares
(Perkins & Murmann, 2018).
Outstanding)
Price Earnings Ratio
700 USD/2.86
244.7552
The PER shows that TESLA
(Share Price (End of
is financially healthy than
Quarter / EPS)
most of its competitors
Return On Equity (Net
3318/ 34947
0.0949
With 9.49 percent as the
Income – Preferred
ROE, there is a lot of hope
Dividends /
for stakeholders.
Shareholder’s Equity)
4
Return On Assets (Net
3280/66,038
0.0497
Income / Total Assets)
The ROA is 4.97% if
truncated and 5% if rounded
off. Globally and for
NASDAQ, 5% is a good
figure for stakeholders.
Net Profit Margin (Net
3280/18756
0.1749
10% net profit margin is
Income / Total
industry-acclaimed as
Revenue),
healthy. As such, 17.49%
exceeds expectations
FINANCIAL
66,038/39,947
1.6
The company has enough
LEVERAGE (Total
assets to cover its liabilities
Assets / Shareholder’s
(Perkins & Murmann, 2018)
Equity)
TOTAL ASSET
18756/66,038
0.2840
Given that it is in the utility
TURNOVER RATIO
sector, anything between 0.25
(Total Revenue / Total
and 0.5 is commendable
Assets).
(Perkins & Murmann, 2018).
Overall, TESLA’s financial health is something that investors (existing and prospective) can
peg their financial success on in the short and long run. The company’s CEO, Elon Musk, is
very frugal (only spending or investing in necessities).
5
References
Chen, Y., & Perez, Y. (2018). Business model design: lessons learned from Tesla Motors.
In Towards a Sustainable Economy (pp. 53-69). Springer, Cham.
Perkins, G., & Murmann, J. P. (2018). What does the success of Tesla mean for the future
dynamics in the global automobile sector?. Management and Organization
Review, 14(3), 471-480.
FIN 320 Project One Financial Analyst Job Aid
Stacy Blaise
SNHU
FIN 320
17 May 2022
Financial Responsibilities
According to Bradshaw et al (2017), a financial analyst has many responsibilities depending on
the organization he or she is placed in. These responsibilities include:
•
•
•
•
•
•
•
•
The analysis of present and past financial information and performance.
Preparation of reports and projections with respect to analysis.
Evaluation of present depreciation and capital expenditure.
Exploration of investment opportunities (Qian et al., 2019).
Establishment and evaluation of profit plans.
Identification of trends in financial performance and offering improvement
recommendations.
Offering forecasting and financial models.
Coordination with other officials of the finance team to look at forecasts and financial
information (Busenbark et al., 2022).
Financial Management Decisions
Financial management decisions are important for any business, and it is upon the financial
analyst in charge to help make sound decisions. It is traditional for resources to be limited for
any business, and the limitation in resources requires that the most important things
[operations] be prioritized first (Eisenbeis, 2012). Failing to prioritize the right activities
threatens longevity or entirely compromises the growth, development, and sustainability of a
business. As such, it is upon the financial analyst to know when a business should invest in
labor, invest most in the capital, and invest most in technology (Busenbark et al., 2022). Also,
financial analysts should, with respect to decision making, help the companies they are
affiliated with to strike a balance between all the factors o production.
Accounting Principles
According to Weygandt et al (2019), accounting principles are the regulations that corporates
adhere to in reporting financial information. They are determined by the Financial Accounting
Standards Board (FASB). In clear terms, accounting principles such as those determined by
FASB require specific formats of balance sheets and statements of financial position. FASB
requires standardization because without it would bring about a lot of confusion.
Financial analysts use past and future balance sheets to determine assets, liabilities, and
shareholders’ equity (Weygandt et al., 2019). Additionally, they make statements of financial
position to find out the amount of revenue that the company has made over time. If the above
information is not available, a company will not be able to project its financial future correctly.
Suppose a financial analyst blunders and incorrect or incomplete information is filled in and
presented to the authorities. In that case, a company may be sanctioned as the government may
suspect foul play.
Financial Statements
The key financial statements that analysts work with include the balance sheet, the statement
of financial position, and the statements of cash flows. A financial analyst would need a
balance sheet to determine the assets, liabilities, and equity that their company is entitled to
(Eisenbeis, 2012). The information in a balance sheet helps financial analysts find approaches
to maximize assets and minimize liabilities. Second, the information in income statements
makes financial analysts determine how much revenue their company has been earning over a
certain period i.e., yearly or quarterly. Financial analysts do not raise any alarm if the revenues
are greater than the costs by a larger margin. However, if the gap between the revenue and the
costs is minimal, there is no need for alarm. Lastly, financial analysts need statements of cash
flows to determine how much cash is getting into an organization and the rate at which it is
being spent. Statements of cash flow, on the other hand, helps organizations determine their
overall performance (Busenbark et al., 2022). Financial analysts help their organizations to cut
down on unnecessary expenditures.
Financial Terminology
Financial statement
• Definition: [Financial statements refer to written records, which describe the
company’s financial performance and business operations (Eisenbeis, 2012)].
• How this is used: [Financial analysts use financial statements to make projections and
budgets for a business].
Liquidity
• Definition: [Liquidity is a term used to show how much liquid cash a company has or
how fast it can convert its assets to liquid cash (Eisenbeis, 2012)].
• How this is used: [Financial analysts use the term liquidity preference to convince
clients, lenders, and investors of their creditworthiness.]
Working capital
• Definition: [A working capital refers to a business capital that is used in its daily
trading activities, and is usually calculated by subtracting current liabilities from
current assets (Fuhrmann, 2020)].
• How this is used: [It is used to finance operations, as well as, meet the company’s
short-term duties].
Diversification
• Definition: [Diversification refers to a strategy of growth or development, which
involves a business getting into a new industry or market (Laura, 2021). In other words,
it alludes to developing new products, which do not relate with the business’ initial
lines].
• How this is used: [It’s a strategy used to reduce risks in a business by expanding new
industries and markets and attain greater profitability].
Time value of money
• Definition: [The idea that money has more valuable today than it is in the future
because of its earning potential (Fernando, 2021)]
• How this is used: [It is used to calculate the Net Present Value and the Internal Rate of
Return.]
References
Bradshaw, M. T., Ertimur, Y., & O’Brien, P. C. (2017). Financial analysts and their
contribution to well-functioning capital markets.
Busenbark, J. R., Semadeni, M., Arrfelt, M., & Withers, M. C. (2022). Corporate‐level
influences on internal capital allocation: The role of financial analyst performance
projections. Strategic Management Journal, 43(1), 180-209.
Eisenbeis, R. (2012). Statement of the Financial Economists Roundtable: How to Manage and
Help to Avoid Systemic Liquidity Risk. Journal of Applied Corporate Finance, 24(1),
60–66. https://doi.org/10.1111/j.1745-6622.2012.00365.x
Fernando, J. (2021, September 3). Time Value of Money (TVM). Investopedia.
https://www.investopedia.com/terms/t/timevalueofmoney.asp
Fuhrmann, R. (2020, October 7). How Do You Calculate Working Capital? Investopedia.
https://www.investopedia.com/ask/answers/071114/how-do-you-calculate-workingcapital.asp
Laura. (2021, December 14). Why Market Diversification Is Important in Manufacturing.
Mantec. https://mantec.org/why-market-diversificationimportant/#:~:text=Diversification%20is%20a%20risk%2Dreduction
Qian, C., Lu, L. Y., & Yu, Y. (2019). Financial analyst coverage and corporate social
performance: Evidence from natural experiments. Strategic Management
Journal, 40(13), 2271-2286.
Weygandt, J. J., Kieso, D. E., Kimmel, P. D., Trenholm, B., Warren, V., & Novak, L.
(2019). Accounting Principles, Volume 2. John Wiley & Sons.
1
TESLA’s Financial Health
Stacy Blaise
SNHU
FIN 320
15 May 2022
TESLA’s Financial Health
2
Analysis
Even though this has never been the case, Tesla’s financial health has improved over
the past few years. In the year 2021, Tesla was profitable, and even though its cash balance
went down, it earned more than 2.6 billion USD of operating income in the fourth quarter of
2021 alone. In the year 2021, Tesla earned a lot of profits, beat Earnings Per Share every
quarter, and has a debt-to-equity ratio that is much healthier today. The balance sheet, the
income statement, and the cash flow of the company are as shown belowThe balance sheet
The above balance sheet shows that the total assets in 2022 are more than in any other
of the previous years. They currently stand at 66 billion USD, and Sixty-six billion USD is as
high as any NASDAQ ranking (Chen, Y., & Perez, 2018).
Source-Tesla
The income statement
3
Source-Tesla
The income statement shows that the company’s revenues average is 16 billion USD
on any given day. The entirety of the revenue realized by the company bolsters the gross
profit and presents decent income values.
Cash flow statement
4
Source-Tesla
From the above cash flow statement, it is evident that operating assets are to the tune
of 4 billion USD. These amounts of money are sufficient for the company to satisfy internal
processes and seek business process outsourcing solutions (Perkins & Murmann, 2018).
Recommendations
Tesla should continue enduring with its financial strategy of long-term investing and
patience. This strategy has paid off recently and will also pay off again. The company has to
increase its efficiency, limit costs, and broaden its manufacturing capacity. Now that Tesla is
profitable, it is capable of soliciting the financing of debt at limited costs in comparison to the
past.
5
References
Chen, Y., & Perez, Y. (2018). Business model design: lessons learned from Tesla Motors.
In Towards a Sustainable Economy (pp. 53-69). Springer, Cham.
Perkins, G., & Murmann, J. P. (2018). What does the success of Tesla mean for the future
dynamics in the global automobile sector?. Management and Organization
Review, 14(3), 471-480.

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