Financial Analysis of Daimler and Tesla: A Comparative Study

FINANCIAL ANALYSIS
MANAGEMENT &
ENTERPRISE

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1 Comparing and contrasting the financial position and performance of the two companies
over the last four years. ...............................................................................................................1
2. Critical analysis of the cash position of both the companies over same time period .............6
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
APPENDICES...............................................................................................................................12
Ratio Analysis............................................................................................................................12
Vertical Analysis........................................................................................................................13
Horizontal Analysis...................................................................................................................14

INTRODUCTION
Financial management could be defined as the process involving analysis of money &
investments for persons or businesses to help them in making business decisions. This s essential
for management of the financial resources of company for taking efficient business decisions.
Present report is based over the financial analysis of Daimler and Tesla.
MAIN BODY
1 Comparing and contrasting the financial position and performance of the two companies over
the last four years.
Financial management is process involving planning, controlling, organising as well as
monitoring the financial resources with the view of achieving financial goals & objectives of
organisation. This is an ideal practice to control the activities of organisation like the
procurement of the funds, accounting payments, funds utilisation, risks assessments and
transactions and activities related to money. It is also known as the application of principles for
management of financial possessions of enterprise. Financial analysis refers to the process for
evaluating projects, businesses and other financial transactions for determining their performance
& suitability. It is used mainly for analysing whether the firms are solvent, liquid, stable or
profitable enough for warranting monetary investments.
Daimler AG
Daimler was previously named as Daimler Benz, now commonly known as Mercedes. It
is German multinational corporation dealing in the automotive industry. Daimler as 2014 had
and owned shares in number of buses, trucks, motorcycles and cars including Mercedes Benz,
smart automobile, Mercedes AMG, Western Star and many more. In terms of unit sales it is 13 th
largest manufacturers of cars and largest manufacturers of trucks in world. Company is
component of Euro Stoxx stocks market index (Jones and et.al., 2018). Company is serving the
sector from last 93 years and is headquartered in Mercedesstabe, Stuttgart, Germany. It has the
production output of 3.34 million in 2019. They are having the revenues of €172.745 billion with
the net income of €2.709 billion.
Tesla
Tesla is American electric vehicle & clean energy based corporation based in
California's Palo Alto. It specialises in manufacturing, energy storage from the home for grid
scale and through the acquisitions of the solar panel, solar city and solar roof tiles
1

manufacturing. Company operate multiple productions and assembly plants. It was founded in
2003 and serving the automotive, energy production and energy storage from last 16 years. It has
a production output of 367,500 vehicles. Company has revenues amounting to $24.57 billion in
2019 with the net income of -$0.86 billion. The income of company is suffering continuous
losses from 2014 till now.
The financial performance and position of the companies is analysed carrying out the
ratio analysis. Companies are facing critical situations in the present times as their incomes and
revenues have gone down due the slowing international economy. The effect is suffered by most
of the industries. Automotive industry has also been affected by the same international trade
conflicts and tariff rates. However some of the companies have managed their profitable state but
have faced decline where the companies suffering losses are finding it more critical to survive in
the market. Losses are increasing that is a serious concern for most of the companies.
In the present case financials performance of Daimler and Tesla has been analysed using
more ratio analysis for assessing more deeper performance and business operations (Kraemer-Eis
and et.al., 2019). Daimler and Tesla belongs to the same automotive industry. Daimler is earning
good revenues and therefore is able to maintain high profits and is also much older and
established company as compared with Tesla that is just 16 years old. Company is suffering from
critical survival stage and is facing continuous losses from years. Financial analysis of the
companies.
Daimler Tesla
Liquidity
ratio 2018 2017 2016 2015 2018 2017 2016 2015
Current
ratio 1.24 1.23 1.21 1.19 0.83 0.86 1.07 0.99
Current
assets /
current
liabilities
Liquid
ratio 0.941 0.930 0.908 0.883 0.520 0.561 0.720 0.535
Current
assets -
(stock +
prepaid
expenses)
2