Analyzing A Number Of Business Ratios From A Business Financial Terms

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The purpose of this report is to analyse a number of business ratios from a business financial terms. We presented information about the ROA, current ratio, PE ratio etc. and provided how Tesla’s performance was in the share market. These data would be useful for investors when they make investment decisions, and it is also important to Tesla’s managements for corporation development in the future. It is recommended that it is difficult to evaluate precisely on the share price due to the incompletely exposure on the overall information.Tesla Motors, Inc. is a technology innovation company which designs, manufactures and sells electronic vehicle. Electronic vehicle not only save money, but also contribute efficiently a healthy and stable…show more content…
If earnings are expected to grow in the future, the estimated P/E will be lower than the current P/E. This measure is also used to compare one company to another with a forward-looking focus. Earnings per share reflects the profitability of the business. This rate indicates the profit per share created. The higher EPS, the more profit created. However, the low EPS doesn’t necessarily mean the business has performed badly. Although Tesla’s EPS growth rate (-193.6% EPS for the current year) is low, Tesla is seen as a prospective business. The reason is the business earns and reinvest its earning back to other field for business development. And the next year expected high EPS growth (135.47%) can also be the fully illustration on this. Return on assets (ROA) measures how profitability a business relates to its total assets. Generally, ROA needs to be positive if the business is growing. However, not all companies with negative ROAs are always bad investments. Tesla’s negative ROA are interpreted that high risk project (trade to fuel) have been reinvested. Although this investment is expected to have a negative ROA after one year or an initial period, but improve over time. When investing in a new area, it takes several years to turn a profit on its initial investment. Current ratio and quick
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