Tesla, Inc. (TSLA) - Debt to Equity Ratio (Annual) (2024)

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Tesla, Inc. (TSLA) - Debt to Equity Ratio (Annual)? ›

Tesla, Inc. (TSLA) had Debt to Equity Ratio of 0.08 for the most recently reported fiscal year, ending 2023-12-31.

Tesla Debt to Equity Ratio: 0.0757 for March 31, 2024

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Tesla's operated at median short term debt coverage ratio of 4.4x from fiscal years ending December 2019 to 2023. Looking back at the last 5 years, Tesla's short term debt coverage ratio peaked in December 2022 at 7.4x.

The low debt-to-equity ratio indicates that Tesla's total debt, including operating and finance leases, comprises only a fraction of the company's equity. Therefore, Tesla's debt does not appear to be a concern because the leverage is insignificant, even after significantly increasing in 2023.

Tesla Inc holds a debt-to-equity ratio of 0.142. At present, Tesla's Short Term Debt is projected to increase significantly based on the last few years of reporting. The current year's Long Term Debt is expected to grow to about 4.1 B, whereas Short and Long Term Debt Total is forecasted to decline to about 5.1 B.

The optimal D/E ratio varies by industry, but it should not be above a level of 2.0. A D/E ratio of 2 indicates the company derives two-thirds of its capital financing from debt and one-third from shareholder equity.

Tesla's financial leverage for fiscal years ending December 2019 to 2023 averaged 2.6x. Tesla's operated at median financial leverage of 2.1x from fiscal years ending December 2019 to 2023. Looking back at the last 5 years, Tesla's financial leverage peaked in December 2019 at 5.2x.

Automakers also need top-of-the-line research and development, which can be costly from an investment standpoint. Cobb attributes Tesla's low debts to a few different things, with the first being its sleek lineup of cars, innovative technology, and its overall dedication to renewable energy and sustainability.

Amazon.com Debt to Equity Ratio: 0.2889 for Dec.

Tesla reported earnings of $7.9 billion in net income on $25.2 billion in revenue during the fourth quarter of 2023. The figures represent an increase in revenue, up from $24.3 billion the same time last year.

How much debt does Tesla have in 2024? ›

Tesla Mostly Debt-Free After 20 Years, Sets New Precedent For Industry.

Tesla Balance Sheet Health

Tesla has a total shareholder equity of $65.2B and total debt of $4.9B, which brings its debt-to-equity ratio to 7.5%. Its total assets and total liabilities are $109.2B and $44.0B respectively. Tesla's EBIT is $7.4B making its interest coverage ratio -7.4.

CEO Elon Musk is by far the largest shareholder, with over 20% of the company's equity. Besides Musk, the largest shareholders are asset management companies like BlackRock, Vanguard, and State Street.

The Highest Debt-To-Equity Ratios

Borrowed money is a bank's stock in trade. Banks borrow large amounts of money to loan out large amounts of money, and they typically operate with a high degree of financial leverage. D/E ratios higher than 2 are common for financial institutions.

Interpreting the Debt Ratio

If the ratio is over 1, a company has more debt than assets. If the ratio is below 1, the company has more assets than debt. Broadly speaking, ratios of 60% (0.6) or more are considered high, while ratios of 40% (0.4) or less are considered low.

The debt-to-income (DTI) ratio measures the percentage of a person's monthly income that goes to debt payments. A DTI of 43% is typically the highest ratio a borrower can have and still get qualified for a mortgage, but lenders generally seek ratios of no more than 36%.