Free Cash Flow at Tesla In the Wall Street Journal on 8/3/2017, an analyst wrote the following: "Tesla Inc. shareholders are betting on a profitable future. They should spare a thought for the present. The electric auto manufacturer reported revenue for the second quarter of $2.8 billion and an adjusted loss per share of $1.33. Cash flow from assets (as we define it in Chapter 2 of the text) was negative $1.1 billion. That cash flow figure could have been even more negative if not for nearly $300 million increase in accounts payable from the first quarter. Tesla forecast an additional $2 billion in net capital spending before the end of the year. More danger looms: Tesla said the initial rollout of Model 3 will result in negative gross margin on that product since overhead costs will dwarf deliveries before production ramps up." Discuss this, focusing on three aspects of the report: The negative cash flow from assets-what is the implication of that? The $300 million increase in Accounts Payable and why that would make the cash flow from assets less negative? The large expected capital spend along with the expected negative gross margin on the Model 3- what does that mean