Calculations to your roe decomposition

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1) Decompose Tesla's ROE for the annual periods 2012-2014. Note any trends you observe.

2) Tesla notes that Q1 automotive revenue includes $51 million from the sale of ZEV credits.* Assuming that 2012-2014 annual revenues are comprised of the same percentage of ZEV revenues as was the case in Q1 of 2015, re-compute Tesla's income after removing the effect of the ZEV sales and decompose ROE using the revised data.

3) Compare your new calculations to your ROE decomposition from question 1.

4) Comment on the quality of Tesla's earnings.

5) Given that Tesla has consistently generated losses, how has the company managed to survive? Read Tesla's Stockholder Letter for the first quarter of 2015. Tesla repeatedly refers to "non- GAAP" results.

6) What are the specific departures Tesla makes from GAAP in computing these numbers?

7) Why do you think the company keeps referring to "non-GAAP" measures?

Reference no: EM13924538

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