Briefly evaluate the ratio trends. Indicate on your worksheet whether each ratio is:(By using the below attachment) stronger / weaker quicker /slower more / less liquid more / less risk

DuPont Analysis on Tesla Inc. for 2 years:

Return on Sales:

Return on sales can be calculated as ratio of net income and revenue.

	2020	2019
Net income	$690,000	$-862,000
Total Revenue	$31,536,000	$24,578,000
Asset Turnover ratio	0.022	-0.035

Return on sales is stronger in 2020 compared to 2019.

Asset Turnover:

Asset turn over can be calculated as Sales divided by Average Total Assets.

	2020	2019
Total Revenue	$31,536,000	$24,578,000
Average Total Assets	$52,148,000	$34,309,000
Asset Turnover ratio	0.605	0.716

Asset turnover ratio much better in 2019 compared to 2020.

Return on Assets:

Return on assets turn over can be calculated as net income divided by average Total Assets.

	2020	2019
Net income	$690,000	$-862,000
Average Total Assets	$52,148,000	$34,309,000
Asset Turnover ratio	0.013	-0.025

Return on assets is stronger in 2020 compared to 2019.

Financial Leverage:

Financial Leverage can be calculated as ratio of average assets and average equity.

	2020	2019
Average assets	$52,148,000	$34,309,000
Average equity	$23,075,000	$7,467,000
Financial Leverage ratio	2.26	4.6

Financial leverage is lower in 2020 when compared to 2019.

Return on Equity:

Return on equity can be calculated by dividing Net income with Shareholders equity.

	2020	2019
Net income	$690,000	$-862,000
Shareholders equity	$22,225,000	$6,618,000
Return on equity	0.0311	-0.13

Return on equity is stronger in 2020 compared to 2019.

Debt ratio can be calculated as:

Debt Ratio = (total Liabilities) / (Total Assets)

Debt ratio can be calculated as follows:

	2020	2019
Total Liabilities	$30,946	$29,993
Total Assets	$42,779	$41,290
Total Debt ratio	72.34%	72.64%

=E12/E13

Gross Profit Margin (%) is given as:

Gross Profit Margin (%) = (Gross Profit) / (sales)

Gross profit margin can be calculated as

	2020	2019
Gross Profit	$23,2448	$22,057
Total sales	$78,112	$75,356
Gross Profit Margin	29.76%	29.27%

=E24/E25

Free cash flow can be calculated using cash flow statement as

Free Cash flow = cash flow from operations capital expenditure

Cash flow from operations can be calculated using the operating section of cash flow statement and capital expenditure can be calculated using the investing section of the cash flow statement.

Cash flow from operations	$7,117	$5,973
Capital expenditure	$2,944	$3,416
Free cash flow	$4,173	$2,557

=E10-E11

Time interest earned ratio shows the companys ability to pay the debt obligation.

It is calculated as:

Time Interest Earned Ratio = (EBIT) / (Interest Expense)

Time interest earned ratio can be calculated as:

	2020	2019
EBIT (Operating Income)	$4,658	$4,110
Interest Expense	$468	$434
Time Interest Earned Ratio	9.95	9.47

=E50/E51

Accounts Receivable Turnover is given as:

Accounts Receivable Turnover = (Credit sales) / (Average Receivables)

Accounts Receivable Turnover can be calculated as:

	2020	2019	2018
Credit Sales	$78,112	$75356	$0
Receivables	$0	$0	$0
Average Receivables	$0	$0	$0
Accounts receivable	0	0

=E66/E68

Since receivables are zero therefore accounts receivable turnover is zero.

Inventory turnover is given by:

Inventory Turnover = (cost of goods sold) / (average inventory)

Inventory turnover is calculated as:

	2020	2019	2018
Cost of goods sold	$54,886	$53,299
Inventory	$8,992	$9,497	$8,597
Average inventory	$9,245	$9,047
Inventory turnover	5.93	5.89

=E84/E86