a- compute the company\'s current ratio and quick ratio for the most recent year

Question

a- compute the company's current ratio and quick ratio for the most recent year reported. Do these ratios provide support that TESLA MORTOR'S INC. is able to repay its current liabilities as they come due? explain.

b- compute the company's debt ratio. Does Home Depot appear to have excessive debt?Explain.

c- examine the company's statement of cash flows. Does TESLA MOTORS 'S cash flow from operation activities appear adequate to cover its current liabilities as they come due? Explain.

http://www.sec.gov/Archives/edgar/data/1318605/000156459016013195/tsla-10k_20151231.htm

Explanation / Answer

a)

Current Ratio=Current Assets/Current Liabilities

=2,791,568/2,816,274

=.9912

this should be more than 1 hence ti would be able to pay only 99% of its current liabilities.

Quci Ratio =Current assets-Inventory/current laiblties

=2,791,568-1,277,838/2,816274

=.5375

it should be 1.

it is highly reliable on inventory for payment to current liablities.

b)

Debt Ratio=Total liabilities/Total Assets

=6,961,471/8,092,460

=..86 is to 1

no, it does not have excessive debt

c)

Cash Flows From Operating Activities=-524499

Current liablities=2,816,274

NO, it 's cash flow is in negative.

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