The objective of this report is (i) to analyze both TESLA and LUCID in terms of its profitability, liquidity, and solvency, (ii) to compare the companys financial ratios with those of its competitor, and (iii) to provide your investment and credit recommendations. Based on your research, prepare a well-written, concise report that covers the following issues.

A. Make common-size F/S for each firm (Tesla and Lucid). Your data should cover at least two years of B/S and I/S.

B. Compute the following ratios for the two years, make a table of ratios and include the table in an appendix to this report.

a. Return on equity

b. Return or assets

c. Earnings per share

d. Profit margin percentage

e. Current ratio

f. Quick ratio

g. Accounts receivable turnover and average collection period

h. Inventory turnover and average inventory days outstanding

i. Times interest earned

j. Liabilities-to-Equity ratio

k. Price/Earnings (P/E) ratio

C. Compute the ratios in (B) above for the LUCID and include them in the appendix.

Based on your computations in (A), (B), and (C) above, address the following:

Overall performance:

1. What is your assessment of the overall performance of TESLA in recent years? How does TESLA performance compare to LUCID?

Profitability:

1. What is your assessment of the profitability of TESLA in recent years? How does TESLA profitability compare to LUCID?

2. Compare the cash flows from operating activities for TESLA with the net income for the most recent year. What factors have contributed to the difference between these two numbers?

Investment utilization:

1. How well does TESLA manage its assets in recent years? What does the comparison of TESLA with LUCID tell you?

Financial condition:

1. Will TESLA be able to meet its obligations as they become due? How does TESLA liquidity compare with that of LUCID?

2. What is the capital structure of TESLA (i.e., what percentage of total assets of the company is financed through liabilities and what percentage through stockholders equity)? Is the capital structure of LUCID significantly different from that of TESLA? Briefly explain your answer.

Recommendations:

1. Based on your analysis, would you loan money to TESLA short-term? Would you loan money to TESLA long-term? Explain your answer.

2. Provide a recommendation as to whether an individual should buy, sell, or hold (if they already own it) the stock of TESLA. Your recommendation should be supported by adequate explanations.