no manipulating.
You said cash burn was 100 million.
You're really talking about different things. It is factually correct that Tesla's cash reserves went from 3.53B in Q3 to 3.37B in Q4, or a reduction of 160M. If Tesla could maintain that rate of reduction, Tesla's current cash reserves would last for an additional 21 quarters.
The main thing I'm seeing in the financial media, repeated over and over since the updated Bloomberg bond rating, is an assertion that Tesla will somehow be unable to pay its bills soon.
Looking at the 2017 Annual Report
Tesla - Annual Report, on p. 63, we can see Tesla's last known cash position:
I look at things in terms of Energy and Power. Money or Money valued assets are Energy. Power is ability to move Money over a time period. One could have a lot of Energy stored up, but not be able to move it, as in an illiquid asset like a house. Or one could have only a modest amount of Energy stored up, but be able to disburse it immediately, as in a $20 bill in hand.
I look at short term Energy Needs and Power availability.
What Tesla has on hand (Energy Available):
Cash and Cash Equivalents 3,367,914 (bank account)
Accounts receivable, net 515,381 (money likely to come in soon)
Restricted cash (I ignored this, because it is not resources the company can use in the near term)
Inventory 2,263,537 (resources that can be quickly turned into items to sell, and/or finished goods ready to ship)
Prepaid expenses and other current assets 268,365
6,415,197 Billion in Cash + Materials & Other Stuff (services, utilities, etc.) to build product
What Tesla has to disburse (Energy Needed):
Accounts payable 2,390,250 (purchases that have been invoiced from suppliers)
Accrued liabilities 1,731,366 (purchases from suppliers that have not yet been invoiced)
Current portion of long-term debt and capital leases 796,549 (loan payments due in the next year)
Current portion of solar bonds and promissory notes issued to related parties 100,000 (loan payments due in the next year)
5,018,065 Billion total in invoices that will come due, invoices that haven't yet been received, long term loan debt that is due.
Other items on the liability side to address. I'm not sure how much Energy draw these actually cause over a quarter, but I suspect it is much less than their line value.
- Deferred revenue 1,015,253. This is $$$ that Tesla has received from customers for product that they have not yet delivered. It shouldn't cost them this amount to produce and deliver the product.
- Resale value guarantees 787,333. This is $$$ that Tesla might have to pay to buy back cars covered by their previous Resale guarantee program. Keep in mind that any buybacks would take place over time longer than the quarter, and that any cars purchased back are themselves assets that can be resold.
- Customer deposits 853,919. Self explanatory. $$$, ether $1000/unit for Model 3, or $2500/unit for Model S or X, to reserve a place in line to buy a vehicle. Tesla will likely spend only a % of this amount per car to actually produce and deliver. The liability this incurs is spread out over time.
The key question is whether Tesla as an institution can provide enough Power to satisfy the Draw of its existence. Suppliers of materials, services, and utilities need to be paid. Debts have to be paid. Employees need to be compensated.
And on the other side, Tesla is being supplied with Power: customers pay for their vehicles, solar systems, energy storage systems, and anything else Tesla sells. Capital and debt raises also supply Power.
Moody's estimated that Tesla currently needs about 500M in cash cycling in and out. I assume this is similar to my monthly expenses, where I have a checking account with some $, paychecks for $ incoming, and $ for bills outgoing. The amount varies depending on when things go in and out, but the bank calculates an Average Daily Balance for each statement.
