I agree Tesla is an industry leader in electric vehicles. However, their success has benefitted legacy car manufacturers and opened the industry to new smaller manufacturers, increasing competition (Gray, 2022). This market expansion will continue to cut into Tesla's profits, as consumers get more options. Further complicating Tesla's profits are ongoing issues with quality control, which CEO Elon Musk recently acknowledged is costing the company billions of dollars (McDougall, 2022). Further still, according to Cars.com (2022), in the years covered in the Nasdaq report (2022), Tesla issued 31 recalls, supporting issues with quality control.

All that said, just looking at the numbers, Tesla's total liabilities in 2018 and 2019 were dangerously close to matching its assets. In the years 2020 and 2021, total liabilities were slightly less than half of the total assets. For most companies, this could be problematic. However, when the CEO is the richest man in the world ((Moskowitz, 2022), shareholder equity is really not a problem. Although, investors would have to wonder how long Mr. Must will keep Tesla afloat. And while the 2021 net income shows a significant turnaround, perhaps it would be more prudent to invest in one of the legacy or newer manufacturers. Besides, if you only had $1000 to invest in April 2022, you would not have been able to purchase Tesla stock that was trading @ $1091.26.

• Lend support for your colleague's reasoning as to why he or she would (or would not) invest in the selected company.
• Provide an alternate perspective based on the financial data you observed.