Since both Tesla and GM operate on a different business model, a retail-based for Tesla and a wholesale-based for GM, we will see if the different business models will affect the asset turnover ratio between the two companies.īefore we start to look at the asset turnover ratio of Tesla and GM, we will run through the asset part of their balance sheet to get an idea of what makes up their current and long-term assets. In this article, we will compare the asset turnover ratios of both Tesla and General Motors and find out how they stack up to each other in terms of assets. In general, an asset-heavy company needs to invest continuously in assets, including properties, plants, and equipment, to generate sales. In this aspect, both Tesla and General Motors rely heavily on current and long-term assets to produce sales. The reason for the low asset turnover ratio is due to the large asset base of these automakers.Ī low asset turnover ratio usually indicates that a company is operationally asset-heavy. Current assets such as cash and cash equivalents are huge in the balance sheets and they are used mainly as working capitals during the normal course of the business operations.Īdditionally, both Tesla and GM have a reasonably low asset turnover ratio, notably at less than 100%. On top of that, an equally large number of current assets are also present in the balance sheet of these automakers.
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