I know this question does not come directly from study material, so please forgive me if this is the wrong place to post it. I was attempting to fill out the table from section 3.3 of Reading 26 (Understanding Cash Flow Statements) using real data from Tesla’s latest 10-Q, but was struggling to arrive at the correct value of $863.2 million. All values are for the 9 mo. period ending Sept 30, 2018. Can anyone see where I’m getting this wrong?
So far I have:
Cash received from customers: 13,595,775 (Revenue - Increase in AR)
Cash paid to suppliers: -11,480,130 (COGS + Increase in inventory - Increase in AP)
Cash paid to employees: ??? I know this is salary and wage expense less increase in salary and wages payable, but TSLA does not directly report this. It is directly included in R&D expense and COGS. So this value is currently zero in my spreadsheet.
Cash paid for operating expenses: -72,244 (Other operating exp - Decrease in prepaid exp - Increase in other accrued liab)
I’m a bit confused as to whether or not this should include all operating expenses, or just “other”. However, when I include all operating expenses it will decrease my final total by 3 billion, making it negative.
Cash paid for interest: -488,384
This is the interest expense reported on the income statement (interest payable is not reported).
Cash paid for income tax: -35,959 (ITE- increase in IT payable)
Once again, there isn’t a value reported for IT payable in the 10-Q.
This adds up to 1,555,053 million , so I’m clearly way off. I’d really appreciate if anyone could let me know where I’m getting this wrong. It’s just a bit different doing this with a real example compared with the book examples that I’m used to.
Well using TSL actual data it is not that simple you most lilkely omitted a few items, TSL B/S is vast and consists of many non cash items that requires adjustments. And in addition to that, I noticed number of typos page 137 commitments of lenders should be 1 100 000 000 vs 100 000 000…??
How about other current liabilities like
Current liabilities Accounts payable Accrued liabilities and other Deferred revenue Resale value guarantees Customer deposits
Look how comlicated these adjustments must be on the basis of below excerpt form 10-Q
Quote from TSL 10-Q Nov 2018
Cash Flows from Operating Activities Our cash flows from operating activities are significantly affected by our cash investments to support the growth of our business in areas such as research and development and selling, general and administrative. Our operating cash inflows include cash from vehicle sales, lease payments directly fromcustomers, customer deposits, sales of regulatory credits and energy generation and storage products. These cash inflows are offset by our payments tosuppliers for production materials and parts used in our manufacturing process, employee compensation, operating lease payments and interest payments on our financings.Net cash used in operating activities of $570.5 million during the nine months ended September 30, 2017 changed favorably by $1.43 billion to netcash provided by operating activities of $863.2 million during the nine months ended September 30, 2018. This favorable change was primarily due to the decrease in net operating assets and liabilities of $852.5 million and the increase in net income, excluding non-cash expenses and gains, of $581.2 million.The decrease in net operating assets and liabilities was mainly driven by an increase in accounts payable and accrued liabilities, as a result of increased expenditures to support our ramp of Model 3 deliveries and a decrease in operating lease vehicles primarily due to the adoption of the new revenue standard, wherein certain vehicle sales where revenue was previously deferred either as an in-substance operating lease, such as certain vehicle sales to customers or leasing partners with a resale value guarantee, we now recognize revenue when the vehicles are shipped as sale with a right of return. These decreases were partially offset by the increase in accounts receivable and inventory, as a result of increased Model 3 and energy products deliveries and production