Review Teslas economic profit trend for the past five years. Is this trending in the right direction, too high, too low, misrepresented because of some factor? How or why?

Tesla's Balance Sheet: Year Total Assets Operating Liabilities Net Operating Assets 2016 2017 2018 2019 2020 $ 22,664 $ 28,655 $ 29,740 $ 34,309 $ 52,148 $ 2,917 $ 3,715 $ 4,777 $ 5,862 $ 8,865 $ 19,747 $ 24,940 $ 24,963 $ 28,447 $ 43,283 Total Debt Total Equity and Claims Total Debt, Equity and Claims $ 7,128 $ 10,315 $ 11,971 $ 13,419 $ 11,739 $ 12,619 $ 14,625 $ 12,992 $ 15,028 $ 31,544 $ 19,747 $ 24,940 $ 24,963 $ 28,447 $ 43,283 Tesla's Income Statement: Year Total Revenue Cost of Revenue, Total Selling, General and Other expense Operating Income $ $ $ $ 2016 2017 2018 2019 2020 7,000 $ 11,759 $ 21,461 $ 24,578 $ 31,536 5,401 $ 9,536 $ 17,419 $ 20,509 $ 24,906 2,266 $ 3,855 $ 4,429 $ 4,138 $ 4,636 (667) $ (1,632) $ (387) $ (69) $ 1,994 Given information for Tesla: Cost of debt Tesla (from the footnotes to the financial statements) Beta for Tesla (from Yahoo or other financial sources) Normalized risk free rate of return in the market (observing the 10 rate on government issued se Equity risk premium (from historical studies of the market) Market value of debt (use book or amount disclosed in the footnotes if different) Number of common shares outstanding Market price of the common stock on July 12, 2021 Market value of equity (number of shares times the stock price) 2.16% 2.00 2.50% 5.00% $ 11,739 963 $ 683.00 $ 657,729 Calculate the required return (weighted average cost of capital) Market Weights Component Weighted Values Cost Cost Debt $ 11,739 2% 2.16% 0.04% Equity $ 657,729 98% 12.50% 12.28% $ 669,468 12.32% Required return (weighted average cost of capital).. Calculate the Economic Profit (Economic Value Added) Net Operating Assets $ 19,747 $ 24,940 $ 24,963 $ 28,447 $ 43,283 times the required return 12.32% 12.32% 12.32% 12.32% 12.32% Required income in dollars $ 2,433 $ 3,072 $ 3,075 $ 3,504 $ 5,332 Year Operating Income earned Less required income Economic profit or (loss) $ $ $ 2016 2017 (667) $ (1,632) $ 2,433 $ 3,072 $ (3,100) $ (4,704) $ 2018 2019 2020 (387) $ (69) $ 1,994 3,075 $ 3,504 $ 5,332 (3,462) $ (3,573) $ (3,338) Another way to look at this: Return on invested capital Weighted average cost of capital Spread -3.38% 12.32% -15.70% -6.54% 12.32% -18.86% -1.55% 12.32% -13.87% -0.24% 12.32% -12.56% 4.61% 12.32% -7.71% Tesla's Balance Sheet: Year Total Assets Operating Liabilities Net Operating Assets 2016 2017 2018 2019 2020 $ 22,664 $ 28,655 $ 29,740 $ 34,309 $ 52,148 $ 2,917 $ 3,715 $ 4,777 $ 5,862 $ 8,865 $ 19,747 $ 24,940 $ 24,963 $ 28,447 $ 43,283 Total Debt Total Equity and Claims Total Debt, Equity and Claims $ 7,128 $ 10,315 $ 11,971 $ 13,419 $ 11,739 $ 12,619 $ 14,625 $ 12,992 $ 15,028 $ 31,544 $ 19,747 $ 24,940 $ 24,963 $ 28,447 $ 43,283 Tesla's Income Statement: Year Total Revenue Cost of Revenue, Total Selling, General and Other expense Operating Income $ $ $ $ 2016 2017 2018 2019 2020 7,000 $ 11,759 $ 21,461 $ 24,578 $ 31,536 5,401 $ 9,536 $ 17,419 $ 20,509 $ 24,906 2,266 $ 3,855 $ 4,429 $ 4,138 $ 4,636 (667) $ (1,632) $ (387) $ (69) $ 1,994 Given information for Tesla: Cost of debt Tesla (from the footnotes to the financial statements) Beta for Tesla (from Yahoo or other financial sources) Normalized risk free rate of return in the market (observing the 10 rate on government issued se Equity risk premium (from historical studies of the market) Market value of debt (use book or amount disclosed in the footnotes if different) Number of common shares outstanding Market price of the common stock on July 12, 2021 Market value of equity (number of shares times the stock price) 2.16% 2.00 2.50% 5.00% $ 11,739 963 $ 683.00 $ 657,729 Calculate the required return (weighted average cost of capital) Market Weights Component Weighted Values Cost Cost Debt $ 11,739 2% 2.16% 0.04% Equity $ 657,729 98% 12.50% 12.28% $ 669,468 12.32% Required return (weighted average cost of capital).. Calculate the Economic Profit (Economic Value Added) Net Operating Assets $ 19,747 $ 24,940 $ 24,963 $ 28,447 $ 43,283 times the required return 12.32% 12.32% 12.32% 12.32% 12.32% Required income in dollars $ 2,433 $ 3,072 $ 3,075 $ 3,504 $ 5,332 Year Operating Income earned Less required income Economic profit or (loss) $ $ $ 2016 2017 (667) $ (1,632) $ 2,433 $ 3,072 $ (3,100) $ (4,704) $ 2018 2019 2020 (387) $ (69) $ 1,994 3,075 $ 3,504 $ 5,332 (3,462) $ (3,573) $ (3,338) Another way to look at this: Return on invested capital Weighted average cost of capital Spread -3.38% 12.32% -15.70% -6.54% 12.32% -18.86% -1.55% 12.32% -13.87% -0.24% 12.32% -12.56% 4.61% 12.32% -7.71%