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Would more deposits help the bottom line?

Would more deposits help the bottom line?

Anyone know if putting a deposit on an M3 would be included in the bottom line calc for this quarter?
Or are they kept in a separate fund?

Captain_Zap | 16. syyskuu 2016

Very few states require the deposit to be held in escrow. Mine was.

I thought that deposits after receipt, are considered a liability. Tesla owes goods to the purchaser. Otherwise, they need to refund the deposit.

Disclaimer: I am not an accountant and I read this from a source about 5 years ago that I cannot recall.

rgrant | 16. syyskuu 2016

The escrow makes sense as the deposits are fully refundable. So I think you're right that it would have no effect.

makobill | 16. syyskuu 2016

In my mind, the effect would be more on the value of the company (stock price) and subsequent generation of cash - than the actual deposits themselves. If Tesla was to get a reservation bump number doubling what we had today, you'd see a much easier path to cash for future endeavors. That's my thoughts anyway...

Captain_Zap | 16. syyskuu 2016

@rgrant

Most states do not require escrow. I think it is only one or two that do. Escrow is likely rare.

johndoeeyed | 16. syyskuu 2016

The deposits are not held in escrow.
This is specified in the reservation agreement itself.
https://www.tesla.com/sites/default/files/pdfs/model_3_reservation_agree...

Al1 | 16. syyskuu 2016

I am not an accountant either, and deposits should be considered liability. However they should have positive impact on cash, which may have impact on bottom line, e.g. if you pay in cash you may get discount (reduce costs), more you have cash, less you need to borrow (hence savings on interest expenses).

Captain_Zap | 16. syyskuu 2016

@johndoeeyed

State law trumped the agreement at least in the state where I live. Tesla had to make special arrangements.

Red Sage ca us | 16. syyskuu 2016

The Great State of Washington has some laws that trump quite a few things in contracts made elsewhere. I believe that Microsoft is a big fan of that fact. So much so that they require all arbitration of disputes be handled there.

dansplans | 17. syyskuu 2016

Deposits add to cash on hand, but are listed elsewhere on the balance sheet as a liability.

brando | 17. syyskuu 2016

To look up financial information for yourself

http://ir.tesla.com/sec.cfm?view=all

Now use the browser view
(blue link) and when you have the chosen document (10Q for example)
use your keyboard and do ctrl-f then look for search box in upper right area of your browser

dansplans | 17. syyskuu 2016

@brando

That's hilarious. 10q reports don't matter for buying stock, but are of interest when considering propping up Tesla's financials.

Al1 | 17. syyskuu 2016

As of June 30, 2016 on Balance Sheet Customer deposits are reported at 679,834 versus 283,370 at the end of 2015.

Al1 | 17. syyskuu 2016

10Q is Tesla's financials and can't be used to prop themselves up.

And of course it does matter for stock buying. All so called fundamentals come from those financials and feed into analyst's estimates and speculations.

robert.s.bjekich | 17. syyskuu 2016

Deposits are debited to cash(increase) and credited to a liability(increase) which is balance sheet neutral. Deposits are not recognized as income until the vehicle is delivered. The cash maybe available for operations and thus reduce overall borrowings.

kevin | 17. syyskuu 2016

It doesn't go to the "bottom line" but it reduces the amount of cash they have to raise in the next round. So, it's a good thing for Tesla.

brando | 17. syyskuu 2016

A|1 +1