Financial analysis of The TOYOTA MOTOR CORPORATION

Presents major and popular companies publish their fiscal information such as balance sheet, hard currency flow, fiscal statement and others in order to execute the fiscal place of the company on the universe market. All this fiscal information makes an influence on attraction of the company for investors and clients.

The intent of this study is to analyze fiscal analysis instruments and methods harmonizing to published informations of the company. The object of this study is Toyota Motor Corporation which takes the 7th topographic point as the largest company worldwide and the 2nd topographic point as the largest maker of cars. Toyota Motor Corporation founded in 1937 by Mr. Kiichiro Toyoda now is a celebrated transnational car manufacturer merely known as Toyota. This company has 28 bring forthing installations all over the universe, employs over 300A 000 people and sells vehicles in over 170 countries/regions.

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As for me the ground why I have chosen this company was to analyze and understand how this company was wining for so many old ages and even holding planetary jobs with gas pedal and fiscal crisis Toyota still is one of the taking auto manufacturers. Consequently the analysis of the fiscal statements of Toyota Company can give the replies for many inquiries. Besides, one more ground of my pick is that Toyota is one of the largest auto distributers in my state, in Kazakhstan. I wanted to larn more what Toyota did for my state as a client and what is place of TMC in universe as in Kazakhstan Toyota autos are truly demanded.

The history of the

Toyota Motor Corporation

The epoch of information and engineering made human race to develop different Fieldss of concern and car production was one of them. There are tonss of companies established in XIX-XX century holding a rich history, and Toyota Motor Corporation is non an exclusion.

* * *

Kiichiro Toyoda, born in 1894 founded Toyota Motor Corporation in August 28, 1937. Kiichiro devoted his full life to the fabrication autos. And his first A1 paradigm rider auto was created in 1935 which initiated the birth of TMC.

The Toyota Motor Corporation today

Toyota Motor Corporation now is a celebrated transnational car manufacturer merely known as Toyota. This company has tonss of mills worldwide and green goodss such autos and coachs branded as Lexus, Toyota, Scion.

The Ratio analysis of

The Toyota Motor Corporation

The full fiscal image for possible investors of any company is the one-year study that makes an analysis of the fiscal profitableness on the base of which a determination can be done whether invest or non. To execute the state of affairs of TMC in a more precise manner it is necessary to analyse the fiscal place of the company via fiscal ratios, statements and profitableness. Fiscal ratios are helpful indexs of public presentation and fiscal state of affairs of the company. The fiscal statements provide with the information from ratios. All these informations give a full vision of tendencies and company ‘s fiscal place. As many other concern companies suffered from the planetary fiscal crisis, TM was impressed every bit good. Besides the great dirt of Toyota autos remember did n’t go through without a hint. All these events made a great influence on the fiscal stableness of the company.

For the beginning, the observation of the chief fiscal statements such as income for the period, gross, basic net incomes and dividends per portion is really utile analysis. For gross statement of Toyota, the lessening can be considered from 262 394 ( $ 1000000s ) on the terminal of March 2008 to 202 814 ( $ 1000000s ) on the terminal of 2010.

As a consequence, income for the period of 2008-2009 reduced about for 21 % and 2009-2010 for 2.5 % due to several jobs as the planetary fiscal crises and Toyota autos recall because of proficient jobs of gas pedal.

Liquidity ratios

Liquidity ratios computation is the start point in ratio analysis. This computation performs the sum of hard currency available in the company in most instances for 12 month.

Current assets ratio

The current assets ratio is a proportion between current assets and current liabilities. The chief thought of this ratio is the current assets must be higher than current liabilities and the proportion to be 3 to 1 consequently.

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

139 914/114 364=1,22

114 396/107 212=1,06

120 633/119 181=1,01

A ratio under 1.2 can be a mark of failing. Generally it may be the cause of the fiscal jobs of the company nevertheless as can be seen from computations above Toyota has been going more stable despite the planetary fiscal crisis and dirt of autos recall.

Quick ratio or acerb trial ratio

One more ratio to be considered is a speedy ratio. It gives the statement analysis of the current assets without stock as it is hard to except the stock ( stock lists ) instantly and can be found as: ( Current assets – stock ) / Current liabilities.

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

( 139914-15222 ) /114364=1,09

( 114396-14776 ) /107212=0,93

( 120633-18222 ) /119181=0,86

This index is a company ‘s short-run liquidity.A ItA measuresA a company’sA ability to meetA its short-run duties withA its most liquid assets. The chief thought of speedy ratio is the higher the speedy ratio, A theA better the place of theA company. The appropriate proportion for this ratio is at least 1/1 intending TMC was traveling up its place as a company during 2008-2010.

Profitability ratios

The following measure is numbering of profitableness ratios which measure the net income of the company in footings of net assets or gross revenues income.

Tax return On Capital Employed

Tax return on capital employed ratio gives the information how successfully the company uses ain capital, merely the rate of return made on the entire capital employed. The computation is as following: Net income before Tax / ( Total Assets – Current Liabilities )

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

3 119/ ( 324 800-114 364 ) *100 % =1,48 %

( 5 674 ) / ( 294 240-107 212 ) *100 % = ( 3,03 % )

24 326/ ( 323 968-119 181 ) *100 % =11,88 %

This ratio is really of import index of profitableness of the company as ROCE shows how successful Toyota owned the capital financed for its assets. From the tabular array above it is apparent that ROCE ratio indexs in 2009 were negative which is connected with the planetary fiscal crisis. However a positive recovery TMC had following twelvemonth.

Gross net income ratio

Gross net income ratio is the manner to cipher the gross net income earned on gross revenues which is determined as ( Gross saless – Cost of Goods Sold ) or Gross profit/Sales. The figures of TMC are as follows:

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

24 263/202 814=12 %

20 996/207 852=10 %

47 599/262 394=18 %

This ratio defines how profitable was the company to its gross revenues.

Mark-up ratio

The following ratio connected with gross net income is mark-up ratio and defined as the Gross Net income divided by the Cost of Gross saless Sold.

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

24 263/178 551=14 %

20 996/186 856=11 %

47 599/214 795=22 %

Net net income ratio

Another ratio as Net Net income Ratio gives the relationship between net income and gross and defined as follows ( Net Net income before Taxation/Revenue ) :

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

3 119/202 814=2 %

( 5 674 ) /207 852= ( 3 % )

24 326/262 394=9 %

This is really of import ratio as it involves all the entity ‘s costs. In the current instance Toyota was more efficient in 2008 than in 2009 and 2010. As a consequence NP ratio is used to cipher the overall profitableness. In instance the net net income is non sufficient, the company will non be able to accomplish a satisfactory return on its investing.

Efficiency ratios

Following measure is to place how the company is profitable in relation to investings. The four chief ratios should be identified: fixed assets turnover, stock turnover, trade debtor/creditor aggregation period.

Fixed assets turnover

FAT is a proportion of net gross revenues to fixed assets. It measures ability of the company to bring forth net gross revenues from fixed-asset investings ( belongings, works and equipment ) . The higher the fixed-asset turnover the more efficaciously the company is utilizing the investing in fixed assets to bring forth grosss. The expression for FAT is Net Gross saless divided by Net Property, Plant and Equipment.

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

202 814/71 820=2,82

207 852/74 939=2,77

4/77 972=3,37

Stock turnover or stock list turnover

A ratio that measures how frequently stock lists are used per twelvemonth. Stock turnover is defined as: Sales/Inventory

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

202 814/15 222=13,32

207 852/14 776=14,07

262 394/18 222=14,40

Inventory turnover to be compared against industry norms. A low turnover agencies

hapless gross revenues and, therefore, surplus of stock list. A high ratio Tells either strong gross revenues or uneffective purchasing.

Trade debitor aggregation period

This ratio evaluates how easy the entity can obtain its money to avoid hard currency flow jobs. The expression is ( trade debitors / gross revenues ) x 365

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

( 75 859/202 814 ) *365=136,52 yearss

( 62 997/207 852 ) *365=110,63 yearss

( 74 140/262 394 ) *365=103,13 yearss

As can be seen from the tabular array above the trade debitors collection period was increasing since 2008 to 2010 which determines that the clip for debitors to pay increased.

Trade creditor aggregation period

The similar computation is for creditors as: ( merchandise payables/turnover ten 365 yearss ) .

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

( 41 159/202 814 ) *365= 74,07 yearss

( 29 274/207 852 ) *365= 51,41 yearss

( 49 225/262 394 ) *365= 68,47 yearss

Investing ratios

This ratio is a measuring of the direct involvement of investors or stockholders. It covers

analysis of dividend output, dividend screen, net incomes per portion, price/earnings ratio and capital geartrain.

Dividend output

Dividend output is expressed as an one-year per centum of the company ‘s one-year hard currency dividend per portion divided by the current monetary value of the stock. The stockholder can value his income by comparing dividend per portion and market monetary value per portion. The computation is dividend per share/market portion monetary value:

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

0,56/46,23=1,2 %

1,23/38,51=3,2 %

1,73/61,35=2,8 %

Dividend screen

This ratio shows how frequently dividend can be received from current net incomes. The expression

is: net income after tax/dividends.

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

2 569/1 846=1,39times

4 670/4 455=1,05times

16 368/4 300=3,81times

Net incomes per portion

Net incomes per portion is a published information provided in the company ‘s one-year study.

Mar 31, 2010, $

Mar 31, 2009, $

Mar 31, 2008, $




Price/earnings ratio

Price/earnings ratio defines relationship of market monetary value per portion and net incomes per portion.

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008




Net incomes output

This ratio is the relationship of net incomes ratio to monetary value

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008





Gearing is ratio of borrowed capital and capital employed and calculated as ( short-run loans and Overdrafts + long-run liabilities ) / stockholders financess x 100.

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

( 64 966 + 41 159 + 75 079 ) /110 870*100=163,44 %

( 70 748 + 29 274 + 63 799 ) /101 865*100=160,82 %

( 62 163 + 49 225 + 59 706 ) /118 470*100=144,42 %

Interest screen

Interest screen is a ratio used to specify if a company is able to pay involvement on outstanding debt. The expression of involvement coverage ratio is ( net incomes before involvement and revenue enhancements ( EBIT ) of one period ) / ( involvement expensesA of the same period )

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

3 477/358=9,71 %

( 5 199 ) /475= ( 10,95 % )

24 786/460=53,88 %

From informations above it can be seen that TMC had fiscal jobs with involvement screen as the ratio fell down in 2009 nevertheless recovered in 2010.


The Toyota Motor Corporation is one of the biggest universe autos bring forthing company. Nowadays it has tonss of fabricating mills all over the universe and the demand for Toyota autos is traveling up twelvemonth by twelvemonth as cars of this company are of good quality, sold on available monetary value and safety. The fiscal analysis of the company performed the good statement in 2008 and recovery procedure boulder clay 2010 every bit TMC as other car manufacturers suffered from the planetary fiscal crisis. Though Toyota ‘s image was collapsed due to 1000000s of autos recall, the company still has a stable place on the universe market and will recovery easy.

In decision, I would indicate out that the strong potency of TMC will return the degree it had before and pull more and more investors to its concern.


Fiscal Statement, Balance Sheet and Cash Flow are available from the following nexus – hypertext transfer protocol: // s=TM+Income+StatementHYPERLINK “ hypertext transfer protocol: // s=TM+Income+Statement & A ; one-year ” & amp ; HYPERLINK “ hypertext transfer protocol: // s=TM+Income+Statement & A ; one-year ” one-year


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