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$TSLAQ Since Greenlight Capital has joined the party examining the A/Rec balance for $TSLA. Here is the gross accounts receivable compared to auto sales. Look at the gross jump from Q42018 to Q12019. 18.79% to 44.78%. It then "reverts" to only 33% of auto sales. 1/7
Q12019 the company made a $500m accrual to a sales return account. Sales with rights of return are allowed under new Rev Rec standards. You need a reserve for the returns. They adopted in the standard at Q12018. Notes said accrual was funding the guaranteed buyback program 2/7
The 12 month contingency column reports what was disclosed as the potential guarantee payments for the next 12 months. Q42108, they had a years worth of reserve. Q12019 did not disclose the contingency. Use Q42018 as an estimate - 3.50 years reserve at Q1 3/7
At Q3? Now there are 7 years of accruals. So magically they reversed $16.7m of accruals from the reserve to make the Q32019 profit miracle. 4/7
Conspiracy theories aside, the reserve for bad debts and returns function the same. It looks like someone when to the principles' office at year end for the receivables. To not report a credit loss, it was that previous overseas program of providing a buyback guarantee 5/
Now the part that @davidein questions. WTF is the deal with the a/rec? It's not leasing receivables. Or, solar panels. A/R was almost half of sales in Q12019. And is 1/3 of sales in Q2/Q3 2019. Einhorn noted that IR said the receivable was due to Europe late deliveries. 5/7
Here is geographic sales compared to the A/R. It includes all sales but it does raise a question. Look at other geography of sales. This should really be the rest of Europe plus Japan and Korea. 6/7
This is not exact due to the combined sales in all business lines, but it makes the point of how 110% of sales from Europe was financed in Q1 or why it is consistently over 2/3 of sales each quarter since Q1. 7/7
