What is the Effective Income Tax Rate From Continuing Operations
Analysis of Income Taxes
- Income Tax Expense (Benefit)
- Effective Income Tax Rate (EITR)
- Components of Deferred Tax Assets and Liabilities
- Adjustments to Financial Statements: Removal of Deferred Taxes
- Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
- Adjusted Net Profit Margin
- Adjusted Financial Leverage
- Adjusted Return on Equity (ROE)
- Adjusted Return on Assets (ROA)
Income Tax Expense (Benefit)
Tesla Inc., income tax expense (benefit), continuing operations
US$ in millions
| 12 months ended: | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Federal | — | — | — | (1) | (10) | ||||||
| State | 9 | 4 | 5 | 3 | 2 | ||||||
| Foreign | 839 | 248 | 86 | 24 | 43 | ||||||
| Current | 848 | 252 | 91 | 26 | 35 | ||||||
| Federal | — | — | (4) | — | — | ||||||
| State | — | — | — | — | — | ||||||
| Foreign | (149) | 40 | 23 | 32 | (4) | ||||||
| Deferred | (149) | 40 | 19 | 32 | (4) | ||||||
| Provision for income taxes | 699 | 292 | 110 | 58 | 32 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
| Item | Description | The company |
|---|---|---|
| Current | Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. | Tesla Inc. current increased from 2019 to 2020 and from 2020 to 2021. |
| Deferred | Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. | Tesla Inc. deferred increased from 2019 to 2020 but then decreased significantly from 2020 to 2021. |
| Provision for income taxes | Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. | Tesla Inc. provision for income taxes increased from 2019 to 2020 and from 2020 to 2021. |
Effective Income Tax Rate (EITR)
Tesla Inc., effective income tax rate (EITR) reconciliation
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Statutory federal tax rate | 21.00% | 21.00% | 21.00% | 21.00% | 35.00% | |
| Effective tax rate, before effect of U.S. tax law change | 11.02% | 25.30% | -16.54% | -5.76% | 31.29% | |
| Effective tax rate | 11.02% | 25.30% | -16.54% | -5.76% | -1.43% |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
| Item | Description | The company |
|---|---|---|
| Effective tax rate, before effect of U.S. tax law change | Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. | Tesla Inc. effective tax rate, before effect of U.S. tax law change increased from 2019 to 2020 but then slightly decreased from 2020 to 2021. |
Components of Deferred Tax Assets and Liabilities
Tesla Inc., components of deferred tax assets and liabilities
US$ in millions
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Net operating loss carry-forwards | 7,607 | 2,172 | 1,846 | 1,760 | 1,576 | ||||||
| Research and development credits | 923 | 624 | 486 | 377 | 307 | ||||||
| Other tax credits and attributes | 335 | 168 | 126 | 128 | 118 | ||||||
| Deferred revenue | 546 | 450 | 301 | 156 | 201 | ||||||
| Inventory and warranty reserves | 377 | 315 | 243 | 165 | 75 | ||||||
| Stock-based compensation | 115 | 98 | 102 | 102 | 97 | ||||||
| Operating lease right-of-use liabilities | 430 | 335 | 290 | — | — | ||||||
| Deferred GILTI tax assets | 556 | 581 | — | — | — | ||||||
| Financial instruments | — | — | — | — | 3 | ||||||
| Investment in certain financing funds | — | — | — | — | 24 | ||||||
| Accruals and others | 191 | 205 | 16 | 28 | 23 | ||||||
| Deferred tax assets | 11,080 | 4,948 | 3,410 | 2,716 | 2,424 | ||||||
| Valuation allowance | (9,074) | (2,930) | (1,956) | (1,806) | (1,844) | ||||||
| Deferred tax assets, net of valuation allowance | 2,006 | 2,018 | 1,454 | 910 | 580 | ||||||
| Depreciation and amortization | (1,279) | (1,488) | (1,185) | (861) | (538) | ||||||
| Investment in certain financing funds | (209) | (198) | (17) | (33) | — | ||||||
| Operating lease right-of-use assets | (391) | (305) | (263) | — | — | ||||||
| Deferred revenue | (49) | (50) | — | — | — | ||||||
| Other | (13) | (61) | (24) | (24) | (19) | ||||||
| Deferred tax liabilities | (1,941) | (2,102) | (1,489) | (918) | (556) | ||||||
| Deferred tax assets (liabilities), net of valuation allowance | 65 | (84) | (35) | (8) | 24 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
| Item | Description | The company |
|---|---|---|
| Deferred tax assets | Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. | Tesla Inc. deferred tax assets increased from 2019 to 2020 and from 2020 to 2021. |
| Deferred tax assets, net of valuation allowance | Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. | Tesla Inc. deferred tax assets, net of valuation allowance increased from 2019 to 2020 but then slightly decreased from 2020 to 2021. |
| Deferred tax assets (liabilities), net of valuation allowance | Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. | Tesla Inc. deferred tax assets (liabilities), net of valuation allowance decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level. |
Adjustments to Financial Statements: Removal of Deferred Taxes
Tesla Inc., adjustments to financial statements
US$ in millions
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Adjustment to Total Liabilities | ||||||
| Total liabilities (as reported) | 30,548 | 28,418 | 26,199 | 23,426 | 23,023 | |
| Less: Noncurrent deferred tax liabilities, net | 24 | 151 | 66 | — | — | |
| Total liabilities (adjusted) | 30,524 | 28,267 | 26,133 | 23,426 | 23,023 | |
| Adjustment to Stockholders' Equity | ||||||
| Stockholders' equity (as reported) | 30,189 | 22,225 | 6,618 | 4,923 | 4,237 | |
| Less: Net deferred tax assets (liabilities) | 65 | (84) | (35) | (8) | 24 | |
| Stockholders' equity (adjusted) | 30,124 | 22,309 | 6,653 | 4,931 | 4,214 | |
| Adjustment to Net Income (loss) Attributable To Common Stockholders | ||||||
| Net income (loss) attributable to common stockholders (as reported) | 5,519 | 721 | (862) | (976) | (1,961) | |
| Add: Deferred income tax expense (benefit) | (149) | 40 | 19 | 32 | (4) | |
| Net income (loss) attributable to common stockholders (adjusted) | 5,370 | 761 | (843) | (944) | (1,965) | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
Tesla Inc., Financial Data: Reported vs. Adjusted
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Tesla Inc., adjusted financial ratios
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Net Profit Margin | ||||||
| Reported net profit margin | 10.25% | 2.29% | -3.51% | -4.55% | -16.68% | |
| Adjusted net profit margin | 9.98% | 2.41% | -3.43% | -4.40% | -16.71% | |
| Financial Leverage | ||||||
| Reported financial leverage | 2.06 | 2.35 | 5.18 | 6.04 | 6.76 | |
| Adjusted financial leverage | 2.06 | 2.34 | 5.16 | 6.03 | 6.80 | |
| Return on Equity (ROE) | ||||||
| Reported ROE | 18.28% | 3.24% | -13.03% | -19.83% | -46.29% | |
| Adjusted ROE | 17.83% | 3.41% | -12.67% | -19.14% | -46.64% | |
| Return on Assets (ROA) | ||||||
| Reported ROA | 8.88% | 1.38% | -2.51% | -3.28% | -6.84% | |
| Adjusted ROA | 8.64% | 1.46% | -2.46% | -3.17% | -6.86% | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
| Financial ratio | Description | The company |
|---|---|---|
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted net income divided by total revenue. | Tesla Inc. adjusted net profit margin ratio improved from 2019 to 2020 and from 2020 to 2021. |
| Adjusted financial leverage | A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income. | Tesla Inc. adjusted financial leverage ratio decreased from 2019 to 2020 and from 2020 to 2021. |
| Adjusted ROE | A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity. | Tesla Inc. adjusted ROE improved from 2019 to 2020 and from 2020 to 2021. |
| Adjusted ROA | A profitability ratio calculated as adjusted net income divided by adjusted total assets. | Tesla Inc. adjusted ROA improved from 2019 to 2020 and from 2020 to 2021. |
Tesla Inc., Financial Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to common stockholders | 5,519 | 721 | (862) | (976) | (1,961) | |
| Revenues | 53,823 | 31,536 | 24,578 | 21,461 | 11,759 | |
| Profitability Ratio | ||||||
| Net profit margin1 | 10.25% | 2.29% | -3.51% | -4.55% | -16.68% | |
| Adjusted for Deferred Taxes | ||||||
| Selected Financial Data (US$ in millions) | ||||||
| Adjusted net income (loss) attributable to common stockholders | 5,370 | 761 | (843) | (944) | (1,965) | |
| Revenues | 53,823 | 31,536 | 24,578 | 21,461 | 11,759 | |
| Profitability Ratio | ||||||
| Adjusted net profit margin2 | 9.98% | 2.41% | -3.43% | -4.40% | -16.71% | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2021 Calculations
1 Net profit margin = 100 × Net income (loss) attributable to common stockholders ÷ Revenues
= 100 × 5,519 ÷ 53,823 = 10.25%
2 Adjusted net profit margin = 100 × Adjusted net income (loss) attributable to common stockholders ÷ Revenues
= 100 × 5,370 ÷ 53,823 = 9.98%
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted net profit margin | An indicator of profitability, calculated as adjusted net income divided by total revenue. | Tesla Inc. adjusted net profit margin ratio improved from 2019 to 2020 and from 2020 to 2021. |
Adjusted Financial Leverage
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 62,131 | 52,148 | 34,309 | 29,740 | 28,655 | |
| Stockholders' equity | 30,189 | 22,225 | 6,618 | 4,923 | 4,237 | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.06 | 2.35 | 5.18 | 6.04 | 6.76 | |
| Adjusted for Deferred Taxes | ||||||
| Selected Financial Data (US$ in millions) | ||||||
| Total assets | 62,131 | 52,148 | 34,309 | 29,740 | 28,655 | |
| Adjusted stockholders' equity | 30,124 | 22,309 | 6,653 | 4,931 | 4,214 | |
| Solvency Ratio | ||||||
| Adjusted financial leverage2 | 2.06 | 2.34 | 5.16 | 6.03 | 6.80 | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2021 Calculations
1 Financial leverage = Total assets ÷ Stockholders' equity
= 62,131 ÷ 30,189 = 2.06
2 Adjusted financial leverage = Total assets ÷ Adjusted stockholders' equity
= 62,131 ÷ 30,124 = 2.06
| Solvency ratio | Description | The company |
|---|---|---|
| Adjusted financial leverage | A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income. | Tesla Inc. adjusted financial leverage ratio decreased from 2019 to 2020 and from 2020 to 2021. |
Adjusted Return on Equity (ROE)
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to common stockholders | 5,519 | 721 | (862) | (976) | (1,961) | |
| Stockholders' equity | 30,189 | 22,225 | 6,618 | 4,923 | 4,237 | |
| Profitability Ratio | ||||||
| ROE1 | 18.28% | 3.24% | -13.03% | -19.83% | -46.29% | |
| Adjusted for Deferred Taxes | ||||||
| Selected Financial Data (US$ in millions) | ||||||
| Adjusted net income (loss) attributable to common stockholders | 5,370 | 761 | (843) | (944) | (1,965) | |
| Adjusted stockholders' equity | 30,124 | 22,309 | 6,653 | 4,931 | 4,214 | |
| Profitability Ratio | ||||||
| Adjusted ROE2 | 17.83% | 3.41% | -12.67% | -19.14% | -46.64% | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2021 Calculations
1 ROE = 100 × Net income (loss) attributable to common stockholders ÷ Stockholders' equity
= 100 × 5,519 ÷ 30,189 = 18.28%
2 Adjusted ROE = 100 × Adjusted net income (loss) attributable to common stockholders ÷ Adjusted stockholders' equity
= 100 × 5,370 ÷ 30,124 = 17.83%
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted ROE | A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity. | Tesla Inc. adjusted ROE improved from 2019 to 2020 and from 2020 to 2021. |
Adjusted Return on Assets (ROA)
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| As Reported | ||||||
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to common stockholders | 5,519 | 721 | (862) | (976) | (1,961) | |
| Total assets | 62,131 | 52,148 | 34,309 | 29,740 | 28,655 | |
| Profitability Ratio | ||||||
| ROA1 | 8.88% | 1.38% | -2.51% | -3.28% | -6.84% | |
| Adjusted for Deferred Taxes | ||||||
| Selected Financial Data (US$ in millions) | ||||||
| Adjusted net income (loss) attributable to common stockholders | 5,370 | 761 | (843) | (944) | (1,965) | |
| Total assets | 62,131 | 52,148 | 34,309 | 29,740 | 28,655 | |
| Profitability Ratio | ||||||
| Adjusted ROA2 | 8.64% | 1.46% | -2.46% | -3.17% | -6.86% | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
2021 Calculations
1 ROA = 100 × Net income (loss) attributable to common stockholders ÷ Total assets
= 100 × 5,519 ÷ 62,131 = 8.88%
2 Adjusted ROA = 100 × Adjusted net income (loss) attributable to common stockholders ÷ Total assets
= 100 × 5,370 ÷ 62,131 = 8.64%
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as adjusted net income divided by adjusted total assets. | Tesla Inc. adjusted ROA improved from 2019 to 2020 and from 2020 to 2021. |
Source: https://www.stock-analysis-on.net/NASDAQ/Company/Tesla-Inc/Analysis/Income-Taxes
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