Financial Ratios Analysis Of The Toyota Motor Corporation Finance Essay

This report was written to make an analysis of the financial statements of the Toyota Motor Corporation for period from 2008 to 2010, according to analysis of the ratios and trend analysis of absolutes. The review of company’s history and the impact of events happen to TMC gave an opportunity to enlarge our understandings of the entity’s financial situation. Furthermore, this report performs a view to predict and forecast the expectations of the company.

Introduction

Nowadays major and popular companies publish their financial information such as balance sheet, cash flow, financial statement and others in order to perform the financial position of the company on the world market. All this financial data makes an influence on attractiveness of the company for investors and customers.

Which Citation Styles Can You Handle?

We get a lot of “Can you do MLA or APA?”—and yes, we can! Our writers ace every style—APA, MLA, Turabian, you name it. Tell us your preference, and we’ll format it flawlessly.

The purpose of this report is to study financial analysis instruments and methods according to published data of the company. The object of this report is Toyota Motor Corporation which takes the seventh place as the largest company worldwide and the second place as the largest manufacturer of automobiles. Toyota Motor Corporation founded in 1937 by Mr. Kiichiro Toyoda now is a famous multinational automaker simply known as Toyota. This company has 28 producing facilities all over the world, employs over 300 000 people and sells vehicles in over 170 countries/regions.

As for me the reason why I have chosen this company was to study and understand how this company was succeeding for so many years and even having global problems with gas pedal and financial crisis Toyota still is one of the leading car producers. Consequently the analysis of the financial statements of Toyota Company can give the answers for many questions. Also, one more reason of my choice is that Toyota is one of the largest car distributors in my country, in Kazakhstan. I wanted to learn more what Toyota did for my country as a customer and what is position of TMC in world as in Kazakhstan Toyota cars are really demanded.

The history of the

Toyota Motor Corporation

The era of information and technology made human race to develop different fields of business and automobile production was one of them. There are lots of companies established in XIX-XX century having a rich history, and Toyota Motor Corporation is not an exception.

* * *

Kiichiro Toyoda, born in 1894 founded Toyota Motor Corporation in August 28, 1937. Kiichiro devoted his entire life to the manufacturing cars. And his first A1 prototype passenger car was created in 1935 which initiated the birth of TMC.

Are Writing Services Legal?

Totally! They’re a legit resource for sample papers to guide your work. Use them to learn structure, boost skills, and ace your grades—ethical and within the rules.

The Toyota Motor Corporation today

Toyota Motor Corporation now is a famous multinational automaker simply known as Toyota. This company has lots of factories worldwide and produces such cars and buses branded as Lexus, Toyota, Scion.

The Ratio analysis of

The Toyota Motor Corporation

The full financial picture for potential investors of any company is the annual report that makes an analysis of the financial profitability on the base of which a decision can be done whether invest or not. To perform the situation of TMC in a more precise way it is necessary to analyze the financial position of the company via financial ratios, statements and profitability. Financial ratios are helpful indicators of performance and financial situation of the company. The financial statements provide with the information from ratios. All these data give a full vision of trends and company’s financial position. As many other business companies suffered from the global financial crisis, TM was impressed as well. Also the great scandal of Toyota cars recall didn’t pass without a trace. All these events made a great influence on the financial stability of the company.

For the beginning, the observation of the main financial statements such as income for the period, revenue, basic earnings and dividends per share is very useful analysis. For revenue statement of Toyota, the decrease can be considered from 262 394 ($ millions) on the end of March 2008 to 202 814 ($ millions) on the end of 2010.

What’s the Price for a Paper?

Starts at $10/page for undergrad, up to $21 for pro-level. Deadlines (3 hours to 14 days) and add-ons like VIP support adjust the cost. Discounts kick in at $500+—save more with big orders!

As a result, income for the period of 2008-2009 decreased almost for 21% and 2009-2010 for 2.5% due to several problems as the global financial crises and Toyota cars recall because of technical problems of gas pedal.

Liquidity ratios

Liquidity ratios calculation is the start point in ratio analysis. This calculation performs the amount of cash available in the company in most cases for twelve month.

Current assets ratio

The current assets ratio is a proportion between current assets and current liabilities. The main idea of this ratio is the current assets must be higher than current liabilities and the proportion to be 3 to 1 accordingly.

Is My Privacy Protected?

100%! We encrypt everything—your details stay secret. Papers are custom, original, and yours alone, so no one will ever know you used us.

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 sign of weakness. Generally it may be the cause of the financial problems of the company however as can be seen from calculations above Toyota has been becoming more stable despite the global financial crisis and scandal of cars recall.

Is AI Involved in Writing?

Nope—all human, all the time. Our writers are pros with real degrees, crafting unique papers with expertise AI can’t replicate, checked for originality.

Quick ratio or acid test ratio

One more ratio to be considered is a quick ratio. It gives the statement analysis of the current assets without stock as it is difficult to exclude the stock (inventories) immediately 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

Why Are You the Best for Research?

Our writers are degree-holding pros who tackle any topic with skill. We ensure quality with top tools and offer revisions—perfect papers, even under pressure.

(120633-18222)/119181=0,86

This indicator is a company’s short-term liquidity. It measures a company’s ability to meet its short-term obligations with its most liquid assets. The main idea of quick ratio is the higher the quick ratio, the better the position of the company. The appropriate proportion for this ratio is at least 1/1 meaning TMC was going up its position as a company during 2008-2010.

Profitability ratios

The next step is counting of profitability ratios which measure the profit of the company in terms of net assets or sales income.

Return On Capital Employed

Who Writes My Assignments?

Experts with degrees—many rocking Master’s or higher—who’ve crushed our rigorous tests in their fields and academic writing. They’re student-savvy pros, ready to nail your essay with precision, blending teamwork with you to match your vision perfectly. Whether it’s a tricky topic or a tight deadline, they’ve got the skills to make it shine.

Return on capital employed ratio gives the information how successfully the company uses own capital, simply the rate of return made on the total capital employed. The calculation is as following: Profit 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%

Will My Paper Be Unique?

Guaranteed—100%! We write every piece from scratch—no AI, no copying—just fresh, well-researched work with proper citations, crafted by real experts. You can grab a plagiarism report to see it’s 95%+ original, giving you total peace of mind it’s one-of-a-kind and ready to impress.

This ratio is very important indicator of profitability of the company as ROCE shows how successful Toyota owned the capital financed for its assets. From the table above it is evident that ROCE ratio indicators in 2009 were negative which is connected with the global financial crisis. However a positive recovery TMC had next year.

Gross profit ratio

Gross profit ratio is the way to calculate the gross profit earned on sales which is determined as (Sales – 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%

Can You Use Any Citation Format?

Yep—APA, Chicago, Harvard, MLA, Turabian, you name it! Our writers customize every detail to fit your assignment’s needs, ensuring it meets academic standards down to the last footnote or bibliography entry. They’re pros at making your paper look sharp and compliant, no matter the style guide.

20 996/207 852=10%

47 599/262 394=18%

This ratio defines how profitable was the company to its sales.

Mark-up ratio

Can I Change My Order Details?

For sure—you’re not locked in! Chat with your writer anytime through our handy system to update instructions, tweak the focus, or toss in new specifics, and they’ll adjust on the fly, even if they’re mid-draft. It’s all about keeping your paper exactly how you want it, hassle-free.

The next ratio connected with gross profit is mark-up ratio and defined as the Gross Profit divided by the Cost of Sales 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%

How Do I Order a Paper?

It’s a breeze—submit your order online with a few clicks, then track progress with drafts as your writer brings it to life. Once it’s ready, download it from your account, review it, and release payment only when you’re totally satisfied—easy, affordable help whenever you need it. Plus, you can reach out to support 24/7 if you’ve got questions along the way!

Net profit ratio

Another ratio as Net Profit Ratio gives the relationship between profit and revenue and defined as follows (Net Profit before Taxation/Revenue):

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

3 119/202 814=2%

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

How Quick Can You Write?

Need it fast? We can whip up a top-quality paper in 24 hours—fully researched and polished, no corners cut. Just pick your deadline when you order, and we’ll hustle to make it happen, even for those nail-biting, last-minute turnarounds you didn’t see coming.

24 326/262 394=9%

This is very important ratio as it involves all the entity’s costs. In the current case Toyota was more efficient in 2008 than in 2009 and 2010. As a result NP ratio is used to calculate the overall profitability. In case the net profit is not sufficient, the company will not be able to achieve a satisfactory return on its investment.

Efficiency ratios

Next step is to identify how the company is profitable in relation to investments. The four main ratios should be identified: fixed assets turnover, stock turnover, trade debtor/creditor collection period.

Fixed assets turnover

FAT is a proportion of net sales to fixed assets. It measures ability of the company to generate net sales from fixed-asset investments (property, plant and equipment). The higher the fixed-asset turnover the more effectively the company is using the investment in fixed assets to generate revenues. The formula for FAT is Net Sales divided by Net Property, Plant and Equipment.

Can You Handle Tough Topics?

Absolutely—bring it on! Our writers, many with advanced degrees like Master’s or PhDs, thrive on challenges and dive deep into any subject, from obscure history to cutting-edge science. They’ll craft a standout paper with thorough research and clear writing, tailored to wow your professor.

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 inventory turnover

A ratio that measures how often inventories are used per year. Stock turnover is defined as: Sales/Inventory

How Do You Match Professor Expectations?

We follow your rubric to a T—structure, evidence, tone. Editors refine it, ensuring it’s polished and ready to impress your prof.

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 averages. A low turnover means

How Do You Edit My Work?

Send us your draft and goals—our editors enhance clarity, fix errors, and keep your style. You’ll get a pro-level paper fast.

poor sales and, hence, excess of inventory. A high ratio tells either strong sales or ineffective buying.

Trade debtor collection period

This ratio evaluates how easily the entity can obtain its money to avoid cash flow problems. The formula is (trade debtors / sales) x 365

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

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

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

Can You Brainstorm Topics?

Yep! We’ll suggest ideas tailored to your field—engaging and manageable. Pick one, and we’ll build it into a killer paper.

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

As can be seen from the table above the trade debtors collection period was increasing since 2008 to 2010 which determines that the time for debtors to pay increased.

Trade creditor collection period

The similar calculation is for creditors as: (trade payables/turnover x 365 days).

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

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

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

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

Do You Offer Fast Edits?

Yes! Need a quick fix? Our editors can polish your paper in hours—perfect for tight deadlines and top grades.

Investment ratios

This ratio is a measurement of the direct interest of investors or shareholders. It covers

analysis of dividend yield, dividend cover, earnings per share, price/earnings ratio and capital gearing.

Dividend yield

Dividend yield is expressed as an annual percentage of the company’s annual cash dividend per share divided by the current price of the stock. The shareholder can value his income by comparing dividend per share and market price per share. The calculation is dividend per share/market share price:

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

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

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

Can You Start With an Outline?

Sure! We’ll sketch an outline for your approval first, ensuring the paper’s direction is spot-on before we write.

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

Dividend cover

This ratio shows how often dividend can be received from current earnings. The formula

is: profit after tax/dividends.

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

2 569/1 846=1,39 times

4 670/4 455=1,05 times

16 368/4 300=3,81 times

Earnings per share

Can You Add Charts or Stats?

Definitely! Our writers can include data analysis or visuals—charts, graphs—making your paper sharp and evidence-rich.

Earnings per share is a published information provided in the company’s annual report.

Mar 31, 2010, $

Mar 31, 2009, $

Mar 31, 2008, $

0,82

1,72

6,67

Price/earnings ratio

Price/earnings ratio defines relationship of market price per share and earnings per share.

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

46,23/0,82=56,07

38,51/1,72=22,42

61,35/6,67=9,19

Earnings yield

What About Multi-Part Projects?

We’ve got it—each section delivered on time, cohesive and high-quality. We’ll manage the whole journey for you.

This ratio is the relationship of earnings ratio to price

Mar 31, 2010

Mar 31, 2009

Mar 31, 2008

0,82/46,23=0,02

1,72/38,51=0,04

6,67/61,35=0,11

Gearing

Do You Adapt to International Rules?

Yes! UK, US, or Aussie standards—we’ll tailor your paper to fit your school’s norms perfectly.

Gearing is ratio of borrowed capital and capital employed and calculated as (short-term loans and Overdrafts + long-term liabilities) / shareholders funds 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 cover

What does a complex assignment mean?

If your assignment needs a writer with some niche know-how, we call it complex. For these, we tap into our pool of narrow-field specialists, who charge a bit more than our standard writers. That means we might add up to 20% to your original order price. Subjects like finance, architecture, engineering, IT, chemistry, physics, and a few others fall into this bucket—you’ll see a little note about it under the discipline field when you’re filling out the form. If you pick “Other” as your discipline, our support team will take a look too. If they think it’s tricky, that same 20% bump might apply. We’ll keep you in the loop either way!

Interest cover is a ratio used to define if a company is able to pay interest on outstanding debt. The formula of interest coverage ratio is (earnings before interest and taxes (EBIT) of one period)/(interest expenses 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%

Who is my writer? How can I communicate with him/her?

Our writers come from all corners of the globe, and we’re picky about who we bring on board. They’ve passed tough tests in English and their subject areas, and we’ve checked their IDs to confirm they’ve got a master’s or PhD. Plus, we run training sessions on formatting and academic writing to keep their skills sharp. You’ll get to chat with your writer through a handy messenger on your personal order page. We’ll shoot you an email when new messages pop up, but it’s a good idea to swing by your page now and then so you don’t miss anything important from them.

From data above it can be seen that TMC had financial problems with interest cover as the ratio fell down in 2009 however recovered in 2010.

Conclusion

The Toyota Motor Corporation is one of the biggest world cars producing company. Nowadays it has lots of manufacturing factories all over the world and the demand for Toyota cars is going up year by year as automobiles of this company are of good quality, sold on available price and safety. The financial analysis of the company performed the good statement in 2008 and recovery process till 2010 as TMC as other automobile producers suffered from the global financial crisis. Though Toyota’s image was collapsed due to millions of cars recall, the company still has a stable position on the world market and will recovery easily.

In conclusion, I would point out that the strong potential of TMC will return the level it had before and attract more and more investors to its business.

Appendix

Financial Statement, Balance Sheet and Cash Flow are available from the following link – http://finance.yahoo.com/q/is?s=TM+Income+Statement&annual

Tags: Acemyhomework, Affordable online college homework and assignment help from professional tutors, Do my homework market, Native Assignment Help: Online Homework Writing Helper