Toyota is a great company that will contiue to grow for years to come and will remain at the top on the automobile industry. This company's stock is considered by many to be a blue chip stock, which means that it is a good investment no matter what the economic conditions are.
Toyota is the leader of innovations when it comes to vehicles. Many of the company's innovations will be introduced in the coming years, like the solar panel roof that will power the air conditioner of the car.
The company has high buying power and great relationships with its suppliers and that is why the JIT system of Toyota is so effective. The company also uses the Kaizen philosophy which is focused toward continuous improvement.
Toyota is following sociocultural forces with the introduction of many new hybrid vehicles. The Toyota Prius is one of the most highly successful hybrid cars when you consider the amount of sales. The solar panels on the roof of the car are also another example of a green aspect of Toyota's vehicles.
Toyota would be considered by many as a star when looking at the BCG matrix, but in reality it is a cash cow due to the low growth of the automobile industry.
The financials of Toyota are solid today and have been for many years. The company is expected to have slightly lower profitability ratios over the next year, but when the U.S. comes out of the recession, these ratios will increase quickly.
Toyota would be a great company to work for. The company does not want to lay off employees, so a job here would be fairly stable. Also, Toyota is very loyal to its employees and the jobs at Toyota pay a decent rate.
At the current moment I would not suggest investing in Toyota stock. The company is projecting more losses through the rest of the year, but as soon as there is a sign that the U.S. is coming out of the recession I would definately invest in this company. The profitability ratios of the company are good and analysts suggest that Toyota stock is a safe stock to invest in. The company's stock is currently trading for $76.40, which is up about $10 from January, but almost $20 lower than it was trading at the same time last year. The recession really affected the automobile industry, but Toyota was able to stay afloat due to its great financials and lower inventories.
Saturday, June 27, 2009
Wednesday, June 24, 2009
Toyota keeps lead in auto-quality survey as Ford, GM close gap
http://www.latimes.com/business/la-fi-autos-quality23-2009jun23,0,4334706.story?track=rss
This article talks about the ratings that are placed on vehicles by J.D. Power & Associates. The article explains how Toyota is still leading, but Ford and GM are making vehicles that are being ranked as better quality.
This article talks about the ratings that are placed on vehicles by J.D. Power & Associates. The article explains how Toyota is still leading, but Ford and GM are making vehicles that are being ranked as better quality.
Toyota gets 180,000 orders for new Prius hybrid
http://www.usatoday.com/money/autos/2009-06-19-toyota-prius_N.htm?csp=34
This story is about the Toyota Prius' demand in Japan. Toyota only expected to sell 10,000 of the new Prius when they actually sold 180,000 in the first month. This is due to the lower cost and a larger engine that actually gets better gas mileage.
This story is about the Toyota Prius' demand in Japan. Toyota only expected to sell 10,000 of the new Prius when they actually sold 180,000 in the first month. This is due to the lower cost and a larger engine that actually gets better gas mileage.
Toyota Responds to White House
This videos shows how Toyota serrves the consumer by making cars that are fuel efficient and "green." I would suggest that Toyota seems happy with this announcement because they are already geared towards more fuel efficient and greener vehicles.
Tuesday, June 23, 2009
Financial Crisis
http://www.usatoday.com/money/companies/earnings/2009-05-08-toyota-earnings_N.htm?csp=34
This article talks about how the financial crisis in the U.S. has impacted Toyota. The company lost $7.7 billion from January - March. This is the first loss that the company has had since 1937, the year that it was founded. It explains how the lower demand and the higher raw materials costs have caused the company to lose so much money.
This article talks about how the financial crisis in the U.S. has impacted Toyota. The company lost $7.7 billion from January - March. This is the first loss that the company has had since 1937, the year that it was founded. It explains how the lower demand and the higher raw materials costs have caused the company to lose so much money.
Buy American but Promote Foreign
http://www.bloggingstocks.com/2009/05/21/buy-american-but-promote-foreign-brands/
This link is an article that tells how American brands are not competitive globally and how we should stop promoting foreign products so that the American made product will be more competitive.
This link is an article that tells how American brands are not competitive globally and how we should stop promoting foreign products so that the American made product will be more competitive.
Profitability Raitos from Yahoo Finance
I calculated the profitability ratios of Toyota using statistics from Yahoo Finance.
Net Profit Margin = 17,146,000/262,394,000 = 6.53%
Gross Profit Margin = 262,394,000 – 214,795,000/262,394,000 = 18.14%
ROA = 17,146,000/323,968,000 = 5.29%
ROE = 17,146,000/118,470,000 = 14.47%
Toyota has good profitability ratios. As you can see they are generating about $0.14 off of every dollar of equity invested in the company. Also, the company’s ROA indicates that they are generating $0.05 for every dollar of assets that they have. I do want to point out that these numbers are from the income statement and balance sheet for Toyota from March 2008.
Net Profit Margin = 17,146,000/262,394,000 = 6.53%
Gross Profit Margin = 262,394,000 – 214,795,000/262,394,000 = 18.14%
ROA = 17,146,000/323,968,000 = 5.29%
ROE = 17,146,000/118,470,000 = 14.47%
Toyota has good profitability ratios. As you can see they are generating about $0.14 off of every dollar of equity invested in the company. Also, the company’s ROA indicates that they are generating $0.05 for every dollar of assets that they have. I do want to point out that these numbers are from the income statement and balance sheet for Toyota from March 2008.
Toyota Leverage Ratios
I calculated the leverage ratios of Toyota using statistics from Yahoo Finance.
Debt-to-Equity = 205,498,000/118,470,000 = 1.735
Debt Ratio = 205,498,000/323,968,000 = .63
The company is running on about 2 times as much debt as they are equity. This would indicate that the company should issue more common stock to even out the ratio. The company’s debt ratio is pretty good. They have almost one and a half times as many assets as they have liabilities.
Debt-to-Equity = 205,498,000/118,470,000 = 1.735
Debt Ratio = 205,498,000/323,968,000 = .63
The company is running on about 2 times as much debt as they are equity. This would indicate that the company should issue more common stock to even out the ratio. The company’s debt ratio is pretty good. They have almost one and a half times as many assets as they have liabilities.
Monday, June 22, 2009
2010 Toyota Prius "Solar" TV Commercial
This is the new Toyota Prius that uses solar panels to operate the a/c for the car.
Stock Chart
Here is a chart of Toyota's stock price over the last three months. Notice the small drop between May and June.
June 23rd Stock Price
The stock price of Toyota has dropped to $74.73 since May. This is a small drop in price. This does not indicate that Toyota is not performing well.
Current and Quick Ratio Calculated from Yahoo Finance
I calculated the liquidity ratios of Toyota using statistics from Yahoo Finance.
Current Ratio = 120,633,000/119,181,000 = 1.01
Quick Ratio = 120,633,000 – 18,222,000 / 119,181,000 = .86
As you can see Toyota’s current and quick ratio are lower than the standards. The company’s current ratio is about half of what it needs to be. These ratios indicate that Toyota is not very liquid short-term.
Current Ratio = 120,633,000/119,181,000 = 1.01
Quick Ratio = 120,633,000 – 18,222,000 / 119,181,000 = .86
As you can see Toyota’s current and quick ratio are lower than the standards. The company’s current ratio is about half of what it needs to be. These ratios indicate that Toyota is not very liquid short-term.
Valuation Ratios
VALUATION RATIOS
Company Industry Sector S&P 500
P/E Ratio (TTM) -- 8.42 7.68 102.14
P/E High - Last 5 Yrs. 19.00 0.13 0.30 30.36
P/E Low - Last 5 Yrs. 7.50 0.04 0.07 6.38
Beta 0.72 0.95 0.96 1.01
Price to Sales (TTM) 0.57 0.45 0.28 1.79
Price to Book (MRQ) 1.15 1.22 1.41 3.55
Price to Tangible Book (MRQ) 1.15 1.24 1.52 12.46
Price to Cash Flow (TTM) 11.72 8.60 6.25 10.97
Price to Free Cash Flow (TTM) -- 0.04 16.76 40.31
This chart shows valuation ratios for Toyota. I wanted to point out that they have a low beta, which is a measure of overall risk. The company’s beta is much lower than the industry average. This surprises me to see that an automobile manufacturer has such a low beta.
Company Industry Sector S&P 500
P/E Ratio (TTM) -- 8.42 7.68 102.14
P/E High - Last 5 Yrs. 19.00 0.13 0.30 30.36
P/E Low - Last 5 Yrs. 7.50 0.04 0.07 6.38
Beta 0.72 0.95 0.96 1.01
Price to Sales (TTM) 0.57 0.45 0.28 1.79
Price to Book (MRQ) 1.15 1.22 1.41 3.55
Price to Tangible Book (MRQ) 1.15 1.24 1.52 12.46
Price to Cash Flow (TTM) 11.72 8.60 6.25 10.97
Price to Free Cash Flow (TTM) -- 0.04 16.76 40.31
This chart shows valuation ratios for Toyota. I wanted to point out that they have a low beta, which is a measure of overall risk. The company’s beta is much lower than the industry average. This surprises me to see that an automobile manufacturer has such a low beta.
Liquidity & Leverage
FINANCIAL STRENGTH
Company Industry Sector S&P 500
Quick Ratio (MRQ) 0.93 0.89 1.13 1.24
Current Ratio (MRQ) 1.07 1.09 1.47 1.50
LT Debt to Equity (MRQ) 62.63 59.64 49.01 91.71
Total Debt to Equity (MRQ) 125.42 125.65 94.03 129.21
Interest Coverage (TTM) -- 0.02 2.53 43.65
This chart shows Toyota’s financial strength, or liquidity and leverage ratios. As you can see the company’s quick ratio and debt ratio are a little higher than the industry average. The company’s current ratio and debt-to-equity ratio are slightly lower than the industry average.
Company Industry Sector S&P 500
Quick Ratio (MRQ) 0.93 0.89 1.13 1.24
Current Ratio (MRQ) 1.07 1.09 1.47 1.50
LT Debt to Equity (MRQ) 62.63 59.64 49.01 91.71
Total Debt to Equity (MRQ) 125.42 125.65 94.03 129.21
Interest Coverage (TTM) -- 0.02 2.53 43.65
This chart shows Toyota’s financial strength, or liquidity and leverage ratios. As you can see the company’s quick ratio and debt ratio are a little higher than the industry average. The company’s current ratio and debt-to-equity ratio are slightly lower than the industry average.
TOYOTA MOTOR CORPORATION (TM.N) Ratios | Stocks | Reuters.com Profitability Ratios
PROFITABILITY RATIOS
Company Industry Sector S&P 500
Gross Margin (TTM) 10.10 12.38 9.53 39.15
Gross Margin - 5 Yr. Avg. 17.52 20.51 24.81 39.28
EBITD Margin (TTM) 5.04 -- -- --
EBITD - 5 Yr. Avg 12.85 11.49 11.00 22.26
Operating Margin (TTM) -2.25 -0.90 -0.37 --
Operating Margin - 5 Yr. Avg. 6.89 6.19 6.32 17.84
Pre-Tax Margin (TTM) -2.73 -1.26 -0.75 11.88
Pre-Tax Margin - 5 Yr. Avg. 7.34 6.39 6.46 17.61
Net Profit Margin (TTM) -2.45 -1.37 -0.87 8.31
Net Profit Margin - 5 Yr. Avg. 4.44 3.80 3.80 12.32
Effective Tax Rate (TTM) -- 16.48 7.60 25.74
Effecitve Tax Rate - 5 Yr. Avg. 39.58 38.53 42.90 31.48
This chart shows the profitability ratios for Toyota. As you can see the current ratios indicate that they are doing worse in every category compared to the industry. When you look at gross margin they are actually doing better than the sector.
Company Industry Sector S&P 500
Gross Margin (TTM) 10.10 12.38 9.53 39.15
Gross Margin - 5 Yr. Avg. 17.52 20.51 24.81 39.28
EBITD Margin (TTM) 5.04 -- -- --
EBITD - 5 Yr. Avg 12.85 11.49 11.00 22.26
Operating Margin (TTM) -2.25 -0.90 -0.37 --
Operating Margin - 5 Yr. Avg. 6.89 6.19 6.32 17.84
Pre-Tax Margin (TTM) -2.73 -1.26 -0.75 11.88
Pre-Tax Margin - 5 Yr. Avg. 7.34 6.39 6.46 17.61
Net Profit Margin (TTM) -2.45 -1.37 -0.87 8.31
Net Profit Margin - 5 Yr. Avg. 4.44 3.80 3.80 12.32
Effective Tax Rate (TTM) -- 16.48 7.60 25.74
Effecitve Tax Rate - 5 Yr. Avg. 39.58 38.53 42.90 31.48
This chart shows the profitability ratios for Toyota. As you can see the current ratios indicate that they are doing worse in every category compared to the industry. When you look at gross margin they are actually doing better than the sector.
Tuesday, June 2, 2009
Toyota's Mission Statement and Vision Statement
Mission Statement: "To attract and attain customers with high-valued products and services and the most satisfying ownership experience in America."
Vision Statement: "To be the most successful and respected car company in America."
www.toyota.com
Vision Statement: "To be the most successful and respected car company in America."
www.toyota.com
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