A STUDY ON FINANCIAL ANALYSIS OF

TOYOTA MOTOR CORPORATION

By

S.R.SAIRAM

32313139
Of

UNIVERSITY OF MADRAS

SUMMER TRAINING REPORT

Submitted to the

DEPARTMENT OF MANAGEMENT STUDIES

In partial fulfillment of the requirements

for the award of the degree

of

MASTER OF BUSINESS ADMINISTRATION

AUGUST-2014

UNIVERSITY OF MADRAS

CHEPAUK CAMPUS, CHENNAI600005,TAMILNADU,INDIA

PHONE: 044-25399778 FAX :044-25366693
WEBSITE : WWW.UNOM.AC.IN

DEPARTMENT OF MANAGEMENT STUDIES

CERTIFICATE
A STUDY ON FINANCIAL
ANALYSIS OF TOYOTA MOTOR CORPORATION is the bonafide work
This is to certify that this project report titled

of S.R.SAIRAM who carried out the research under my supervision. Certified further,
that to the best of my knowledge the work reported herein does not form part of
any other project report or dissertation on the basis of which a degree or award was
conferred on earlier occasion on this or any other candidate.

Internal Guide
Department

Head of the

ACKNOWLEDGEMENT
I would like to express my sincere gratitude to Our Vice-Chancellor Prof.
R.Thandavan for providing excellent environment and infrastructure and for his

valuable support throughout the course of study.

I take this opportunity to express my gratitude to the Head of the
Department of Management studies, Dr. P.T.SRINIVASAN, B.Tech, M.B.A.,
Ph.D[IIT,M]., for providing me an opportunity and Dr. R.THENMOZHI, M.B.A.,
M.Phil., Ph.D who has given me guidance to do this project work.
This project would not have been successful without the help of G.PRASATH
M.B.A., M.Com. M.Phil of senior personnel of company.
Last but not least I would like to thank all the employees of TOYOTA MOTOR
CORPORATION who have directly or indirectly helped me with their moral support
for the completion of my project.

S.R.SAIRAM

TABLE OF CONTENTS

S.NO

CONTENTS

Page No.

Abstract

List of tables

II

Industry Profile

Company Profile

Production Process

15

Product Profile

18

Financial statement

31

Financial analysis

35

Findings and Suggestions

61

Conclusion

64

INDUSTRY PROFILE
Industry Overview and Analysis
Toyota Motor Corporation competes in the automotive industry. The past five years were
tumultuous for automobile manufacturers. Skyrocketing fuel prices and growing environmental
concerns have shifted consumers' preferences away from fuel-guzzling pickup trucks to smaller,
more fuel-efficient cars. Some automakers embraced the change by expanding their small-car
portfolios and diversifying into the production of hybrid electric motor vehicles. Other
automakers were more reluctant to shift their focus from big to small cars, expecting the price of
fuel to contract eventually, bringing consumers back to the big-car fold. When fuel prices did fall
during the second half of 2008, it was due to the US financial crisis ripping through the global
economy. This had a domino effect throughout the developed and emerging worlds, with many
Western nations following the United States into recession. Industry revenue fell about 15.4% in
2009. Pent-up demands will aid industry revenue growth, estimated at 2.1% in 2013, thus
bringing overall revenue to an estimated $2.3 trillion. Overall, the large declines followed by
recovery are expected to lend the industry average growth of 2.2% per year during the five years
to 2013. Throughout the past five years, growth in the BRIC countries supported production.
Rising income in these countries led to an increase in the demand for motor vehicles. Also,
Western automakers moved production facilities to BRIC countries to tap into these markets and
benefit from low-cost production. Over the next five years, the emerging economies will
continue their growth, and demand for motor vehicles in the Western world will recover. Industry
revenue is forecast to grow an annualized 2.5% to total an estimated $2.6 trillion over the five
years to 2018.

Industry Life Cycle

This industry is in the mature stage of its life cycle. Industry Demand Determinants.
Worldwide automobile demand is tied to vehicle prices, per capita disposable income, fuel prices
and product innovation. On the supply end, vehicle prices stem from material and equipment
costs, with higher steel and plastic prices raising manufacturers' purchasing costs and, ultimately,
retail prices. During the past five years, automakers have been plagued with high steel and
plastics prices, which have raised manufacturing costs and product prices. On the demand side,
per capita disposable incomes determine affordability for consumers. As incomes increase, the
propensity to purchase motor vehicles increases as they become more affordable. Incentives are
6

used to generate sales during periods of low economic growth. Over the past five years, there has
been a significant increase in the number of automobile financing companies being established in
the BRICs. This has resulted in the number and range of automobile loans increasing, which has
contributed to stronger industry demand. In the developed world, overall improved quality
among most manufacturers has caused buyers to feel freer to use price to differentiate similar
products. Consumers are increasingly better informed about a vehicle's actual cost and less likely
to accept large annual price increases. In an era of low inflation, customers familiar with dealer
cost information from consumer publications and the internet have become more astute when
negotiating the purchase of a vehicle. In this way, consumer awareness and access to information
can determine demand. Movements in fuel prices also generally influence the demand for
vehicles by type. During periods of high fuel prices, more fuel-efficient vehicles are in demand.
Over the past five years, the price of fuel has been rising, which has encouraged the adoption of
hybrid and other fuel-efficient models. For example, Japanese carmakers offering more fuelefficient vehicles took market share from manufacturers of large vehicles throughout the latter
half of the past decade. Last, product innovation can spur demand, especially with regard to more
fuel-efficient vehicles such as hybrids and electric models. The more fuel-efficient a model is,
the more likely a consumer will be willing to invest up front in a new car for potential savings on
fuel costs down the road. Analysis of Toyota Motor Corporation by ThembaniNkomo

Porters Five Forces of the Automotive Industry

Threat of New Entry (Weak):
Large amount of capital required
High retaliation possible from existing companies, if new entrants would bring
innovative products and ideas to the industry
Few legal barriers protect existing companies from new entrants
All automotive companies have established brand image and reputation
Products are mainly differentiated by design and engineering quality
New entrant could easily access suppliers and distributors
It is very hard to achieve economies of scale for small companies
Governments often protect their home markets by introducing high import taxes
Supplier power (Weak):
Large number of suppliers
Some suppliers are large but the most of them are pretty small
Companies use another type of material (use one metal instead of another) but only to
some extent (plastic instead of metal)
Materials widely accessible
Suppliers do not pose any threat of forward integration
Buyer power (Strong):
There are many buyers
Most of the buyers are individuals that buy one car, but corporates or governments
usually buy large fleets and can bargain for lower prices
It doesnt cost much for buyers to switch to another brand of vehicle or to start using
other type of transportation
Buyers can easily choose alternative car brand
Buyers are price sensitive and their decision is often based on how much does a
vehicle cost
Buyers do not threaten backward integration
Threat of Substitutes (Weak):

 There are many alternative types of transportation, such as bicycles, motorcycles,

trains, buses or planes
Substitutes can rarely offer the same convenience
Alternative types of transportation almost always cost less and sometimes are more
environment friendly
Competitive Rivalry (Very Strong):
Moderate number of competitors
If a firm would decide to leave an industry it would incur huge losses, so most of the
time it either bankrupts or stays in automotive industry for the lifetime
Industry is very large but matured
Size of competing firms vary but they usually compete for different consumer
segments
Customers are loyal to their brands
There is moderate threat of being acquired by a competitor
Automotive Industry Cost Structure Benchmark
Purchases (70.7%), wages (6.3%), depreciation (6.0%), rent & utilities (1.7%), other (10.4%),
profit (4.9%)
Automotive Industry Competitive Landscape
Market share concentration in the industry is low. The industry is deemed to have a low level of
concentration, and the largest four automakers are estimated to account for about one-third of
global revenue.
Major Companies in the Automotive Industry
Toyota (10.2%), Volkswagen (9.6%), General Motors (6.9%), Ford (5.6%), Others (67.7%)
Key Success Factors in the Automotive Industry:
Flexibility in determining expenditure: Controlling employee-related costs, such as
health and pension costs, makes manufacturers in the developed world more
competitive. Analysis of Toyota Motor Corporation by ThembaniNkomo
Establishment of export markets: Development of export markets helps negate any
downturns in domestic markets.

 Use of most efficient work practices: Good industrial relations through a motivated
workforce assist in minimizing industrial disputes.
Effective cost controls: A close relationship with suppliers and good distribution
channels assist controlling costs.
Access to the latest available and most efficient technology and techniques: The
industry is highly competitive, so enterprises need a technology-enabled competitive
edge.
Optimum capacity utilization: Excessively high plant utilization is required for
success in any modern automobile and light-duty motor vehicle manufacturing plant.

10

COMPANY PROFILE
TOYOTA CORPORATE OVERVIEW:
Founded in 1937, Toyota Motor Corporation is a Japanese company that engages in the
design, manufacture, assembly, and sale of passenger cars, minivans, commercial vehicles, and
related parts and accessories primarily in Japan, North America, Europe, and Asia. Current
brands include Toyota, Lexus, Daihatsu and Hino. Toyota Motor Corporation is the leading auto
manufacturer and the eighth largest company in the world. As of March 31, 2013, Toyota Motor
Corporations annual revenue was $213 billion and it employed 333,498 people.
INTERNAL ENVIROMENT OF TOYOTA:
Core Competency
The core competence of Toyota Motor Corporation is its ability to produce automobiles
of great quality at best prices, thereby providing a value for money to the customers. This core
competence of quality can be attributed to its innovative production practices. The quality aspect
of Toyotas products have revolutionized the automobiles in the past and almost all the
automobile companies had to try and better the quality of their products. It is a cornerstone of the
cost leadership strategy that the company pursues.
Distinctive Competency
Toyotas distinctive competence is its production system known as the Toyota
Production System or TPS. TPS is based on the Lean Manufacturing concept. This concept also
includes innovative practices like Just in Time, Kaizen, and Six Sigma and so on. Toyota has
worked tirelessly over the years to establish this distinctive competence. No other automobile
manufacturer can do it as well as Toyota does. This distinct competence has led to a competitive
advantage that has given Toyota a sustainable brand name and a market leader position.
SWOT ANALYSIS
Strengths:
Strong market position and brand recognition: Toyota has a strong market position in different
geographies across the world. The company's market share for Toyota and Lexus brands,
(excluding mini vehicles) in Japan was 45.5% in FY2012. Similarly, Toyota has a market share
of 12.2% in North America, 13.4% market share in Asia (excluding Japan and China), and 4.3%
11

market share in Europe. In addition, the company holds a 7% share of the Chinese market and a
significant market share in South and Central America, Oceania, Africa and the Middle East
regions. Such strong market position allows the company to gain competitive advantage and also
expand into international markets. In addition, Toyota holds a portfolio of strong brands in the
automotive industry. Thus, the company's strong market position gives it significant competitive
advantage and helps it to register higher sales growth in domestic and international markets.
Strong focus on R&D: Toyota has a strong focus on R&D to expand its product portfolio and
improve the functionality, quality; safety and environmental compatibility of its products. The
company's R&D efforts are directed at developing new products and processes and improving
the capabilities of existing products. The company conducts its R&D operations at 14 facilities
worldwide. Strong focus on R&D has helped the company in incorporating newer features to its
existing range of products and also in bringing out latest technologies in the varied areas. The
company's strong focus on R&D allows it to uphold the technological leadership in most of its
product segments. It also enables Toyota to develop innovative products, leading to strong sales.
Extensive production and distribution network: Toyota has an extensive production and
distribution network. Toyota and its affiliates produce automobiles and related parts and
components through more than 50 manufacturing companies in 27 countries and regions besides
Japan. During FY2012, the company produced 7,435,781 vehicles, including 3,940,000 vehicles
in Japan and 3,495,000 vehicles across all other manufacturing locations. In addition, Toyota has
an extensive distribution network. While the companys geographically well spread production
base diversifies business risks, its extensive distribution network provides a wider reach, thus
boosting revenues.
Weaknesses:
Product recalls could affect brand image: Toyota has conducted a number of product recalls in
the recent past, which could affect the brand image and overall sales of the company. For
instance, in 2011, Toyota recalled 111,000 models of Toyota and Lexus brands vehicles due to
the damage to elements of the substrate and potential shutdown of the hybrid system. Further in
the year, Toyota recalled 181,000 vehicles in Japan in relation to abnormal noise and oil leakage
that Analysis of Toyota Motor Corporation by ThembaniNkomo may have resulted from slack of
bolts in the sub transmission and the rear wheel differential. In addition, the company was
involved in government investigations related to product recalls. For instance, in February 2012,
12

the National Highway Traffic Safety Administration initiated a preliminary investigation of a

potentially faulty power window master switch in the driver-side doors in model year 2007
Camry and RAV4 vehicles. This could also result in significant penalties, which could affect the
operational margins.
Poor allocation of resources as compared to peers: Toyota has low return on equity (ROE) and
return on assets (ROA) compared to its peer companies. The company's competitors such as
Honda Motor and Nissan Motor have more ROE when compared to Toyota. Honda Motor's ROE
was 4.8%, while Nissan Motor's ROE was 8% in FY2012. In contrast, Toyota's ROE was 2.7%
in FY2012. Lower ROE and ROA compared to its peers indicates that the company is not using
the shareholders' money efficiently and that it is not generating high returns for its shareholders.
Thus, poor allocation of resources could hurt shareholder's value and confidence in the long
term.
Opportunities:
Growing global automotive industry: The global automotive industry was severely affected
by the economic downturn, with a decline in revenues being recorded in 2008 and 2009.
However, 2011 saw a strong rebound which has continued into 2012. According to MarketLine,
the global automotive manufacturing industry grew by 8.9% in 2012 to reach a value of $1,563.9
billion. The recovery of global automotive industry thus provides Toyota an opportunity to gain
more customers and increase revenues.
Toyota poised to benefit from growing partnership with BMW: Toyota is poised to benefit
from the growing partnership with BMW. In June 2012, BMW and Toyota signed a
memorandum of understanding aimed at long-term strategic collaboration on technological
fields. As part of the agreement, the two companies will partner for the joint development of a
fuel cell system, joint development of architecture and components for a future sports vehicle,
collaboration on power-train electrification and joint research and development on lightweight
technologies. The growing partnership between the two companies is expected to boost the
technological know-how of the companies and may result in the development of new products
thus increasing revenues in the long run. Also, in the short run, the combined partnership will
result in significant synergies and cost-savings, boosting the operational margins.
Strong outlook for the global new car market: The global new cars market has experienced
moderate growth during 2008-2012. However, forecasts suggest this will accelerate to strong
13

double digit growth during the 2012-2016 periods. Thus, the strong outlook for the global new
car market coupled with the companys new product launches provides a growth opportunity for
the company.
Threats:
Intense competition: The worldwide automotive market is highly competitive. Toyota faces
strong competition from automotive manufacturers in its various markets. The competition
among various auto players is likely to intensify in light of continuing globalization and
consolidation in the worldwide automotive industry. The factors impacting competition include
product quality and features, the amount of time required for innovation and development,
pricing, reliability, safety, fuel economy, customer service and financing terms. Increased
competition may lead to lower vehicle unit sales and large inventory, which may result in
downward pricing pressure, thus impacting the financial condition and results of operations of
the company.
Appreciating Japanese Yen a major concern: Toyota is sensitive to the fluctuations in foreign
currency exchange rates and is principally exposed to fluctuations in the value of the Japanese
Yen, the US dollar and the Euro. The strengthening of the Japanese Yen against the US dollar and
fluctuations in foreign exchange rates would have a material adverse effect on Toyota's reported
operating results, which in turn would impact the valuation of the company.
Natural disasters could impact production structure: Toyota is subject to disruption of
production due to natural disasters such as earthquakes, floods, among others. Toyota primarily
operates in Japan which is a highest earthquake prone region in the world. The country has
witnessed many devastating earthquakes in the recent years which seriously disrupted the
economy. In 2011, the country witnessed one of the worst hit earthquakes in its history in the
form of 2011 Tohoku earthquake, which led to a temporary production halt at its domestic auto
manufacturing facilities. In the same year, major floods occurred in Thailand which halted its
operations and production of about 150,000 Toyota automobiles. Such natural calamities, if
occur frequently, could severely influence the production output of the company due to work
stoppages and in turn impact the overall revenue base and profitability.Analysis of Toyota Motor
Corporation by ThembaniNkomo

14

Toyota Global Vision

Toyota will lead the way to the future of mobility, enriching lives around the world with the
safest and most responsible ways of moving people.
Through our commitment to quality, constant innovation and respect for the planet, we aim to
exceed expectations and be rewarded with a smile.
We will meet our challenging goals by engaging the talent and passion of people, who believe
there is always a better way.
Your Satisfaction Our Commitments

Vision
1. Delight our customers through innovative products, by utilising advanced technologies and
services.
2. Ensure growth to become a major player in the Indian auto industry and contribute to the
Indian economy by involving all

stakeholders.

3. Become the most admired and respected company in India by following the Toyota Way.
4. Be a core company in global Toyota operations.

Mission
1. Practice ethics and transparency in all our business operations.
2. Touch the hearts of our customers by providing products and services of superior quality at a
competitive price.
3. Cultivate a lean and flexible business model throughout the value chain by continuous
improvement.
4. Lead the Toyota global operations for the emerging mass market.

15

BOARD OF DIRECTORS
ALI S. HABIB

Chairman
Ali S. Habib is the Chairman of Indus Motor Company Limited and is also the Founder Director
of the Company. He also serves as a Member on the Board of Directors of Thal Limited, Shabbir
Tiles & Ceramics Ltd., Metro Habib Cash and Carry Pakistan (Pvt.) Ltd. and Habib Metropolitan
Bank Ltd.
Ali S. Habib is a graduate in Mechanical Engineering from the University of Minnesota, USA.
He has attended the PMD Program at Harvard University and currently serving as Chairman of
the Pakistan Business Council.
KEIICHI MURAKAMI

Vice Chairman
Keiichi Murakami was elected as Director of Indus Motor Company Ltd and was appointed as
Vice Chairman with effect from January, 2013. He has been serving at Toyota Motor Corporation
for over 30 years now and has worked in different capacities primarily in the areas of Product
Planning and marketing Research. He has looked after Toyotas business in Asia, Oceana and
Middle East with various Toyota distributors. Murakami had served as Executive Director at
UMWT who is the Toyota distributor in Malaysia.

16

PARVEZ GHIAS

Chief Executive Officer

ParvezGhias is the Chief Executive Officer of Indus Motor Company Limited, since 2005. Prior
to joining the Company, he was the Vice President and CFO at Engro Chemical Pakistan Limited
and also served as a Member of the Board of Directors. He is also serving on the Boards of
Standard Chartered Bank Limited and Dawood Hercules Corporation Ltd.
ParvezGhias is a fellow of the Institute of Chartered Accountants from England & Wales and
member of several faculties of the Institute and holds a Bachelors Degree in Economics and
Statistics.
YOSHIYUKI MATSUO

Senior Director
Mr. Yoshiyuki Matsuo has been appointed in place of Mr. MitoshiOkimotow.e.f. 1st January
2014 as Senior Director Manufacturing and the Board member / Director of Indus Motor
Company Ltd. He has been with the Toyota Group since 1986 during which he has held various
senior executive positions. He has a vast experience in the areas of Production, Logistic, Plant
Engineering and Quality Control at various Toyota plants in the world.
Mr. Yoshiyuki Matsuo is a graduate from the Nanzan University, Japan

17

FARHAD ZULFICAR

Director
FarhadZulficar is the Founder Director of Indus Motor Company Limited. He was the first
Managing Director of the Company from 1989 to 2001 and has also been a Director on various
listed and private companies. He is currently the Vice Chairman of House of Habib and
Chairman of MAKRO Habib Pakistan Ltd. He is a Commerce graduate from University of
Karachi.
MOHAMEDALI R. HABIB

Director
Mohamedali R. Habib is the Founder Director of Indus Motor Company Limited.
He is an Executive Director of Habib Metropolitan Bank Ltd. since 2004 and also serves as a
Member on the Board of Thal Limited and Habib Insurance Company Ltd. He was also
appointed as Joint-President & Division Head (Asia) & Member of General Management of
Habib Bank AG Zurich in 2011. Mohamedali R. Habib is a graduate in Business Management
Finance from Clark University, USA.

18

KYOICHI TANADA

Director
KyoichiTanada was appointed as a Director of Indus Motor Company Ltd. in May 2013.
Currently he is serving as the President of Toyota Motor Thailand. He is also serving as a
Managing Officer, Toyota Motor Corporation.
KyoichiTanada is a graduate in Foreign studies from Tokyo University, Japan
TETSURO HIRAI

Director
Tetsuro Hirai was appointed as Director of Indus Motor Company Ltd. in July2013. He has been
associated with Toyota Motor Corporation from 1980 to 2009, during which he has held various
senior positions. He joined Toyota Tsusho Corporation in January 2010 as a member of
Management team. He holds directorships of certain companies of the Toyota Group in various
countries.
Tetsuro Hirai is a graduate from Faculty of Science and Engineering of Waseda University ,
Japan.

19

PRODUCTION SYSTEM
Harmonizing with the Environment
Globally, Toyota has indicated a strong and diverse commitment to the pursuit of
harmonious growth through its technically advanced and environment-friendly products. There
have been relentless efforts in the crucial fields of mobility, city transportation, resources, society
and environment, through research & development.
Protecting the environment has always been a priority at TKM, starting with the ecofriendly engines that are manufactured for the Toyota vehicles, to the advanced technology that is
used for purification or recycling of waste water at the plant. Apart from this, the plant at Bidadi,
Karnataka, is surrounded by a green belt, meets high environmental standards and has achieved
the ISO 14001 certification in its very first year of operations.
Setting benchmarks for Production Excellence
Quality is ensured in every vehicle that rolls out of Toyota Kirloskar Motor, through inbuilt audits at every process of the system. The company's operational excellence is based on the
improvement tools and methods developed by Toyota under the Toyota Production System
(TPS), greatly emphasizing superlative quality and minimal waste.
In line with Toyota's growing comfort with its India operations, the company set up
Toyota Kirloskar Auto Parts (TKAP), which commenced production of transmissions in May
2004, for its global requirements. Another initiative is the Toyota Techno Park India (TTPI), a
non-profit industrial infrastructure company aimed at boosting local industries and related job
opportunities.
Setting benchmarks for the automobile industry, the manufacturing facility consists of 4
divisions (shops) Press, Weld, Paint and Assembly.
Delivering Excellence
Toyota Production System (TPS) combines a balanced mix of human resources and robot
technology for increased productivity. This system involves two important principles:

20

Jidoka - building quality into the production system and ensuring damaged parts do not proceed
to the next stage.
Just In Time (JIT) - making only what is needed, when it's needed, and only as much as is
needed.
Eco Factory: As part of our sustainable plant initiatives, the plant is designed with an EcoFactory concept to maximise the output with minimum input by creating a highly optimized
manufacturing process. From our energy efficient servo press to our state-of-the-art global body
line, we are able to reduce process steps to further increase our energy efficiency. We also use
water borne paint and a water recycling system that recycles 40% waste water back into the
process, thereby leading to higher resource optimization and contributing towards a greener
society
Committed Partners
In our drive to build the perfect automobile, selecting the components that go in to it
becomes a key criterion for success. We at TKM believe that an innovative, capable and cost
competitive supplier base is critical to our viability.
We perceive suppliers and dealers as equal stakeholders in our drive towards
sustainability. Supplier enhancement initiatives are designed to bring a sense of partnership in all
our endeavors.

Social Contribution
Commitment to Society
As a responsible corporate citizen, Toyota Kirloskar Motor is constantly working towards
the development of people, communities, and the earth at large.
TKM's efforts over the years towards developing a prosperous society include rebuilding
a local residential school, construction of two water tanks in rural
Bangalore that benefit around 80,000 people; reconstruction of a local police station;
awareness on environmental conservation for local schools; distribution of school materials like
21

bags, books, computers, and chairs to under-privileged students; and donation of funds towards
rehabilitating the victims of the Tsunami and the Gujarat earthquake.
Ongoing initiatives:
TKM started the Toyota Safety Education Program (TSEP) - an interactive learning
programme designed to teach school children about road safety in the year 2007. It features
interactive courses, traffic booths, an animated film, computer and board games, and an
informative website.
The Toyota Technical Training Institute (TTTI) was started in the year 2007 to impart
technical know-how about automobiles, or Monozukuri (skilled manufacturing), to students who
have the talent, but not the means, to pursue higher studies. This residential school aims to
develop a sound knowledge base, individual skill sets, a strong body, and a positive attitude in
every student.
TKM in conjunction with Toyota Motor Corporation and its nationwide dealer network
has initiated a unique training initiative - The Toyota Technical Education Program (TTEP). The
special training module, launched in 2006, aims at enhancing the skill sets and employability of
the students at the ITIs in the country.
Conforming to its eco-commitment, Toyota, together with NDTV, conducted a host of
eco-initiatives that culminated in India's first 24-hour live TV programme - Greenathon. The
three-year nationwide environment campaign aims at creating awareness about issues that
threaten the future of our planet. With an overwhelming response from India's leading corporate
houses, top Bollywood stars, musicians, environmentalists, NGOs and educational institutions,
Greenstone Seasons I and II have been tremendously successful.

22

Products and specification

23

MODEL NAME: ETIOS LIVA

SPECIFICATION:
.

0.0012m3 (1.2L) DOHC PETROL ENGINE And New TRD Sportivo Engine
0.0014m3 (1.4L) D-4D DIESEL ENGINE
Anti- braking system with electronic breakforce distribution
Transmission- 5 speed manual
Tank capacity 45litres
12 spokes Alloys
Tone premium interiors
Impact absorbing body structure
Dual front SRS airbags
Keyless entry and door ajar warning
Air conditioner with air filter
Tachometer and digital trip meter
3 spokes- steering wheel
Power windows with driver side auto-down
Mileage diesel -23.59 kmpl , petrol- 17.71kmpl

24

MODEL NAME: ETIOS

SPECIFICATION:

PETROL-4-Cylinder 16V, DOHC, DIESEL - 4-Cylinder 8V, SOHC,D-4D

Transmission - 5 speed manual
Electronic Fuel Injection(EFI), Common Rail Direct Injection(CRDI)
Dual front SRS airbags
Tank capacity - 45 litres
Electronic power steering with tilt function
Adjustable head rest
Body colored bumper
Suspension- torsion beam, Mac pherson strut
ABS with EBD
Keyless entry and door ajar warning
Impact absorbing body structure
Air conditioner with air filter
Central locking system
Mileage diesel -22.33 kmpl , petrol- 16.85kmpl

25

MODEL NAME: ETIOS CROSS

SPECIFICATION:

0.0015m3(1.5L)DOHC petrol engine,0.0014m3(1.4L)D_4D diesel engine

Transmission- 5speed manual
Tank capacity 45 liters
Bold front grille with grille guard & flag lamps
Piano black interior
Sporty seat fabric with stitch and badging
Distinctive side cladding and diamond cut alloys
Sturdy roof rails
OVRM with turn indicators
Ergonomic seats
2DIN audio CD with Bluetooth, USB ,AUX & remote
Cooled 13L glove box
Rear defogger with wiper
ASD with EBD
Mileage; diesel- 23.59 kmpl, petrol-16.78 kmpl

26

MODEL NAME: INNOVA

SPECIFICATION:

D-4D common-rail diesel engine,VVT-I petrol engine

Tank capacity 55liters
High ground clearance
ABS with EBD
7 seater, transmission- 5 speed model
Ventilated front disc brake
SRS airbags
Contemporary body graphics
Exclusive z grade badge
Classy dual tone seat with leather trio
GOA body, Child protector lock
Collapsible steering column
Load sensing proportion valve
High rigidity frame
Immobilizer
Mileage diesel 12.06 kmpl, petrol -10.37kmpl

27

MODEL NAME: COROLLA ALTIS

SPECIFICATION:

1.81 dual VVT-I gasoline engine, 1.4 diesel engine with variable nozzle turbo &
intercooler
7 speed super CVT-I transmission
6 speed manual transmission
Splendid interior design, stylish LED head and tail lamps
R16 alloy wheels
Rear reclining seat
7.0 touch audio with Bluetooth, navigation & voice command
Paddle shift
Best in class leg space
8way power driver seat with lumbar support
Smart entry with push start/stop
Cruise control, Rain sensing wipers
Daytime running lamps
Mileage diesel- 21.3kmpl, petrol- 14.53kmpl

28

MODEL NAME: FORTUNER

SPECIFICATION:

3.0L Diesel engine, intercooler turbocharger

2WD with5-speed automatic transmission
Full time 4WD with 5 speed manual transmission
Tank capacity -80liters
Exceptional All terrain capability
Suspensions
3- driving modes (4WD only)
Front grill and bonnet scoop
Automatic HID head lamps with washer
Side step & roof rails
ORVM with electrical adjust
Multi information display
Black wood like finish panels
Steering wheel with audio, MID and Bluetooth control switches
Assist grip A-pillar
Mileage 12.26kmpl

29

MODEL NAME: CAMRY

SPECIFICATION:

2.5L VVT-I engine

16-inch alloy wheels
Tank capacity-70liters
ECO drive indicator, cruise control
Automatic rain sensing wiper
Headlamps ,grill ,fog lamps
ABS with EBD and break assist
Impact absorbing body structure
Driver and passenger front air bags
Opteron meter
Multi functioning steering
8way power seats
Audio system with excellent sound quality
Mileage 19,61 kmpl

30

MODEL NAME: PRIUS

SPECIFICATION:

Engine - 1.8-litre (2ZR-FXE)

Electrically Controlled Continuously Variable Transmission
MacPherson struts (gas-filled shock absorbers with a stabilizer bar)
Synchronous alternating current motor (Permanent magnet type)
Fuel tank capacity 45 liters
Electronic Fuel Injection
3 drive modes- switch
Evolving HSD
EPS/VSC, airbags
ABS with EBD
Crash safety body
Reduction gear
Nickel metal hybrid battery
15inch alloy wheel
Platform and suspension system
Mileage- 23.09 kmpl

31

MODEL NAME: LC PRADO

SPECIFICATION:

D-4D Diesel with Intercooler Turbocharger, 4 Cylinders In-line

Fuel Tank Capacity 87 liters
5 Speed Automatic transmission
ORVM [ Outside Rear View Mirrors ] with Electrical Adjust, Electric Fold, LED Turn
Signal Indicator
Roof Rails , Rear Spoiler [ with Integrated High Mount Stop Lamp ]
Assist Grips (Roof & Pillar), Overhead storage console with Conversation mirror
Multi terrain monitor & multi terrain select
TEMS and KDSS
7 SRS airbags
Vehicle stability control
Automatic light control system
Mileage 23.91 KMPL

32

SERVICES

33

Express Maintenance ;

3 highly trained technicians work simultaneously

Quality check is an inherent part of each process
Specially designed tools and equipments
Watch your car being serviced
Get your vehicle delivered in 60 minutes

Toyotas Quick Vehicle information ;

Unique e-CRB (evolutionary customer relationship building) tool based on to assure
Faster Response &Resolution to all customer queries
Watch live status of your vehicle being serviced
Get Service Reminder, Special offers & Book appointments to on a call

QUICK onsite support;

Free 24x7 roadside assistance for 3 years for;

Out of fuel
Wrong or contaminated fuels
Lost or lock out key
Tire related
Battery related
Onsite repairs
Accident support

34

Toyotas QUICK NETWORK REACH;

Widespread network which is constantly growing
Designed to enhance customer convenience & equipped with latest equipments
Stop shop solutions for all your needs like finance ,insurance, service, parts, lubricants , tire,
battery & car care solutions under one roof.

Toyotas Qualified Manpower;

Recruited from best technical institutes supported by Toyota under Toyota Technical
Education Program initiative
Toyota technicians are continuously groomed through Toyota Global Training System
Toyota Service Adviser are trained to high Toyota standards and always assist you

Unmatched warranty;

Best in class vehicle warranty [100,000 km / 3years]

Warranty begins from date of sale of vehicle to the first customer
Warranty covers for repairs or replacement of any Toyota found defective
Contact Service Adviser of your Toyota dealership for warranty related support

Toyotas Genuine parts;

Only Toyota Genuine Parts are designed & engineered specially for your Toyota. Over the
years, heavy investments in R&D have been made to study the design, material selection &
internal construction of Toyota Genuine Parts. These parts are also tested under various
simulated extreme conditions to ensure Quality, Reliability & Durability. For peace of mind,
always insist on Toyota Genuine Parts.
All Toyota Genuine Parts carry a 6 month / 10,000 Km [whichever is earlier] Toyota
Warranty*.
If a non-genuine part is fitted to your Toyota, and that part's failure damages your vehicle,
then that damage will not be covered by your Toyota Warranty. Also, when your car is
serviced by a Toyota Dealership, any warranty covered repairs identified will be carried out
and are covered under your Toyota Warranty.

35

FINANCIALS

36

TOYOTA MOTOR CORP ADR (TM) CashFlowFlag BALANCE SHEET

Fiscal year ends in March. JPY in
millions except per share data.
2010-03
2011-03
2012-03
2013-03
2014-03
Assets
Cash and cash equivalents
2258470
2284583
1759501
1824997
2221377
Short-term investments
1793165
1225435
1181070
1445663
2046877
Total cash
4051635
3510018
2940571
3270660
4268254
Receivables
1886273
1449151
1999827
1971659
2036232
Inventories
1422373
1304242
1622282
1715786
1894704
Deferred income taxes
632164
605884
718687
749398
866386
Prepaid expenses
511284
517454
516378
527034
672014
Other current assets
4569875
4443006
4523444
5550353
5980116
Total current assets
13073604
11829755
12321189
13784890
15717706
Gross property, plant and equipment
17093748
16611349
16849282
18223620
19764791
Accumulated Depreciation
-10382847
-10302189
-10613902
-11372381 -12123493
Net property, plant and equipment
6710901
6309160
6235380
6851239
7641298
Equity and other investments
4135599
5398518
6491934
7849681
9931209
Other long-term assets
6429183
6280733
5602462
6997507
8147260
Total non-current assets
17275683
17988411
18329776
21698427
25719767
Total assets
30349287
29818166
30650965
35483317
41437473
Liabilities
Short-term debt
5497997
5951836
5963269
6793956
7780483
Accounts payable
1956505
1503072
2242583
2113778
2213218
Taxes payable
153387
112801
133778
156266
594829
Accrued liabilities
1735930
1773233
1828523
2185537
2313160
Other current liabilities
1342395
1450048
1613421
1662983
1778995
Total current liabilities
10686214
10790990
11781574
12912520
14680685
Long-term debt
7015409
6449220
6042277
7337824
8546910
Deferred taxes liabilities
813221
810127
908883
1385927
1811846
Accrued liabilities
678677
668022
708402
Minority interest
570720
587653
516217
624821
749839
Other long-term liabilities
225323
179783
143351
308078
411427
Total non-current liabilities
9303350
8694805
8319130
10422762
12287640
Total liabilities
19989564
19485795
20100704
23335282
26968325
Common stock
397050
Additional paid-in capital
898381
902810
550650
948090
948358
Retained earnings
11568602
11835665
11917074
12689206
14116295
Treasury stock
-1260425
-1261383
-1135680
-1133138
-1123666
Accumulated other comprehensive
-846835
-1144721
-1178833
-356123
528161
Total stockholders' equity
10359723
10332371
10550261
12148035
14469148
Total liabilities and stockholders'
equity
30349287
29818166
30650965
35483317
41437473
TOYOTA MOTOR CORP ADR (TM) CashFlowFlag INCOME STATEMENT
37

Fiscal year ends in March. JPY in millions

except per share data.
Revenue
Cost of revenue
Gross profit
Operating expenses
Sales, General and administrative
Total operating expenses
Operating income
Interest Expense
Other income (expense)
Income before taxes
Provision for income taxes
Other income
Net income from continuing operations
Other
Net income
Net income available to common shareholders
Earnings per share
Basic
Diluted
Weighted average shares outstanding
Basic
Diluted
EBITDA

2010-03
18950973
16683797
2267176

2011-03
18993688
16615326
2378362

2012-03
18583653
16388564
2195089

2013-03
22064192
18640995
3423197

2014-03
25691911
20801139
4890772

2119660
2119660
147516
33409
177361
291468
-92664
-139920
244212
-34756
209456
209456

1910083
1910083
468279
29318
124329
563290
-312821
-410626
465485
-57302
408183
408183

1839462
1839462
355627
22922
100168
432873
-262272
-326843
368302
-84743
283559
283559

2102309
2102309
1320888
22967
105728
1403649
551686
231519
1083482
-121319
962163
962163

2598660
2598660
2292112
19630
168598
2441080
767808
318376
1991648
-168529
1823119
1823119

133.58
133.58

260.34
260.32

180.42
180.4

607.64
607.56

1150.6
1149.84

1568
1568
1739446

1568
1568
1768181

1572
1572
1523625

1583
1584
2531725

1584
1585
3711563

38

TOYOTA MOTOR CORP ADR (TM) Statement of CASH FLOW

Fiscal year ends in March. JPY in millions
except per share data.
2010-03
2011-03
2012-03
2013-03
2014-03
Cash Flows From Operating Activities
Net income
244212
465485
368302 1083482 1991648
Depreciation & amortization
1414569
1175573 1067830
1105109 1250853
Deferred income taxes
25537
85710
6395
160008
-56279
Accounts receivable
421423
-585464
-168260
-121926
Inventory
56059
51808
-344923
50483
-110819
Accounts payable
649214
-406210
756363
-209284
65312
Accrued liabilities
102207
-40629
Income taxes payable
20943
22127
438527
Other working capital
-39312
461010
246997
597907
401869
Other non-cash items
106044
-190161
-84008
-190256
-213150
Net cash provided by operating activities
2558530
2024009 1452435 2451316 3646035
Cash Flows From Investing Activities
Investments in property, plant, and equipment
-1437601 -1691191 1532082 -1974152 -2678691
Property, plant, and equipment reductions
517565
538037
467946
572632
783530
Purchases of investments
-2413202 -4422106 3173781 -3412423 -4738278
Sales/Maturities of investments
1108741
3716156 2856825 2669091 3319327
Other investing activities
-625687
-257240
-61566
-882460 -1022136
Net cash used for investing activities
-2850184 -2116344 1442658 -3027312 -4336248
Cash Flows From Financing Activities
Debt issued
3178310
2931436 2394807 3392484 4358286
Debt repayment
-2938202 -2489632 2867572 -2682136 -2988923
Common stock repurchased
-10251
-28617
-37448
-43098
Dividend paid
-172476
-141120
-156785
-190008
-459095
Other financing activities
-335363
162260
311651
9212
Net cash provided by (used for) financing
activities
-277982
434327
-355347
477242
919480
Effect of exchange rate changes
-8898
-127029
-55939
137851
93606
Net change in cash
-578534
214963
-401509
39097
322873
Cash at beginning of period
2444280
1865746 2080709 1679200 1718297
Cash at end of period
1865746
2080709 1679200 1718297 2041170
Free Cash Flow
Operating cash flow
2558530
2024009 1452435 2451316 3646035
Capital expenditure
-1437601 -1691191 1532082 -1974152 -2678691
Free cash flow
1120929
332818
-79647
477164
967344

39

FINANCIAL RATIOS
Ratio analysis:-

Ratio Analysis is a form of Financial Statement Analysis that is used to obtain a quick
indication of a firm's financial performance in several key areas. The ratios are categorized as
Short-term Solvency Ratios, Debt Management Ratios, Asset Management Ratios, Profitability
Ratios, and Market Value Ratios.
Ratio Analysis as a tool possesses several important features. The data, which are
provided by financial statements, are readily available. The computation of ratios facilitates the
comparison of firms which differ in size. Ratios can be used to compare a firm's financial
performance with industry averages. In addition, ratios can be used in a form of trend analysis to
identify areas where performance has improved or deteriorated over time.
Because Ratio Analysis is based upon Accounting information, its effectiveness is limited
by the distortions which arise in financial statements due to such things as Historical Cost
Accounting and inflation. Therefore, Ratio Analysis should only be used as a first step in
financial analysis, to obtain a quick indication of a firm's performance and to identify areas
which need to be investigated further
Classification of financial ratios on the basis of function:
On the basis of function or test, the ratios are classified as liquidity ratios, profitability ratios, activity
ratios and solvency ratios
Liquidity Ratios:
Liquidity ratios measure the adequacy of current and liquid assets and help evaluate the ability of the
business to pay its short-term debts. The ability of a business to pay its short-term debts is frequently
referred to as short-term solvency position or liquidity position of the business.
a) Profitability ratios:
Profitability ratios measure the efficiency of management in the employment of business
resources to earn profits. These ratios indicate the success or failure of a business enterprise for a
particular period of time.
40

b) Activity ratios:
Activity ratios (also known as turnover ratios) measure the efficiency of a firm or company in
generating revenues by converting its production into cash or sales. Generally a fast conversion increases
revenues and profits.
c) Solvency ratios:
Solvency ratios (also known as long-term solvency ratios) measure the ability of a business to
survive for a long period of time. These ratios are very important for stockholders and creditors.
OBJECTIVES:The importance of ratio analysis lies in the fact that it presents data on a comparative basis and
enables the drawing of inferences regarding the performance of the firm. Ratio analysis helps in
concluding the following aspects:

a) Liquidity Position:
Ratio analysis helps in determining the liquidity position of the firm. A firm can be said to have
the ability to meet its current obligations when they become due. It is measured with the help of liquidity
ratios.

b) Long- Term Solvency:

Ratio analysis helps in assessing the long term financial viability of a firm. Long- term solvency
measured by leverage/capital structure and profitability ratios.

c) Operating Efficiency:
Ratio analysis determines the degree of efficiency of management and utilization of assets. It is
measured by the activity ratios.

d) Over-All Profitability:
The management of the firm is concerned about the overall profitability of the firm which
ensures a reasonable return to its owners and optimum utilization of its assets. This is possible if
an integrated view is taken and all the ratios are considered together.

41

GROSS PROFIT RATIO:Gross profit ratio is a profitability ratio that shows relationship between gross profit and total net
sales revenue. It is a popular tool to evaluate the operational performance of the business. When gross
profit ratio is expressed in percentage form, it is known as gross profit margin or gross profit percentage.
The basic components of the formula of gross profit ratio are gross profit and sales

FORMULA:-

RATIOS:-

YEAR
SALES

2010

2011

2012

2013

2014

1,89,50,973

1,89,93,688

1,85,83,653

2,20,64,192

2,56,91,911

23,78,362

21,95,089

34,23,197

48,90,772

12.52

11.81

15.51

19.03

22,67,176

GROSS
PROFIT
G.P RATIO(%)

11.96

INTERPRETATION:There is a fluctuation in the gross profit ratio. The percentage of gross profit over sales is
gradually decreasing till 2012 and after which it is increased to 15.51 and 19.03 in 2013 and 2014. Thus it
show an increasing trend from 2013 onwards. It is also apparent that the GP ratio is increasing about 4%
from 2012-2013(11.81%-15.51%) and 2013-2014(15.51-19.03%), Hence it can be stimulated that
between 2014 and 2015 there may be an increase in GP ratio of at least 4%.

42

GROSS PROFIT RATIO

20
18
16
14
12

GROSS PROFIT RATIO

10
8
6
4
2
0
2010

2011

2012

2013

2014

NET
PROFIT RATIO:Net profit ratio is a popular profitability ratio that shows relationship between net profit after tax
and net sales. It is computed by dividing the net profit (after tax) by net sales. The relationship between
net profit and net sales may also be expressed in percentage form. When it is shown in percentage form, it
is known as net profit margin.

FORMULA:-

RATIOS:-

YEAR
SALES
NET PROFIT

2010

2011

2012

2013

2014

1,89,50,973

1,89,93,688

1,85,83,653

2,20,64,192

2,56,91,911

17,39,446

17,68,181

15,23,625

25,31,725

37,11,563

43

N.P RATIO(%)

9.17

9.30

8.19

11.47

14.44

INTERPRETATION:The Net Profit Ratio was 9.17% in 2010 which increased slightly to 9.30% in 2011.There is a
decrease in Net profit Ration in 2012 to 8.19%. However, there is a increase of almost 3% in Net Profit
Ration between 2013-2013 when it was 11.47%. Similarly there is an increase of 3% again for the next
consecutive year in 2014 where the Net Profit Ration was 14.44%

NET PROFIT RATIO

16
14
12
10
8
6
4
2
0

14.44
11.47
9.17

9.3

2010

2011

NET PROFIT RATIO

8.19

2012

2013

2014

CURRENT RATIO:The current ratio is a financial ratio that measures whether or not a firm has enough resources to
pay its debts over the next 12 months. It compares a firm's current asset to its current liabilities. The
current ratio is an indication of a firm's market liquidity and ability to meet creditor's demands.
FORMULA:-

RATIOS:-

YEAR
CURRENT ASSET

2010
1,30,73,604

2011

2012

1,18,29,755

44

1,23,21,189

2013
1,37,84,890

2014
1,57,17,,706

CURRENTLIABILITY
CURRENT RATIOS

1,06,86,214

1,07,90,990

1,17,81,574

1,29,12,520

1,46,80,685

1.22

1.09

1.04

1.06

1.07

INTERPRETATION:There is a fluctuation in the current ratio from 1.22 in 2010 tp 1.09 in 2011 to a decrease in 2012
to 1.94 and then an increase in 2013 to 1.06 and consecutively an increase again to 1.07 in 2014. but the
current asset is well enough to meet current liability.

CURRENT RATIO
1.25

1.22

1.2
1.15

CURRENT RATIO

1.09

1.1

1.04

1.05

1.06

1.07

2013

2014

1
0.95
2010

2011

2012

LIQUID RATIO:In finance, the Acid-test or quick ratio or liquid ratio measures the ability of a company to use
its near cash or quick assets to extinguish or retire its current liability immediately. Quick assets include
those current asset that presumably can be quickly converted to cash at close to their book value.

FORMULA:-

RATIOS:-

45

YEAR

2010

2011

2012

2013

2014

LIQUID ASSET

1,11,39,947

1,00,08,059

1,01,82,529

1,15,42,070

1,31,50,988

CURRENT LIABILITY

1,06,86,214

1,07,90,990

1,17,81,574

1,29,12,520

1,46,80,685

1.04

0.92

0.86

0.89

0.89

LIQUID RATIOS
INTERPRETATION:-

The liquid Asset ratio was 1.04 in 2010 which has shown a gradual decrease to 0.92 % in 2011 to
further decreased to 0.86% in 2012. Between 2012-2013 and 2013-2014 the Liquid Asset Ratio has
remained stable at 0.89 % in both the financial years.

LIQUID RATIO
1.2

1.04

0.92

0.86

0.89

0.89

0.8

LIQUID RATIO

0.6
0.4
0.2
0
2010

2011

2012

2013

2014

INVENTORY TURNOVER RATIO:In accounting, the Inventory turnover is a measure of the number of times inventory is sold or
used in a time period such as a year. The equation for inventory turnover equals the Cost of goods
sold divided by the average inventory. Inventory turnover is also known as inventory turns, stock
turn, stock turns, turns, and stock turnover.

FORMULA:-

46

RATIOS:YEARS
AVG STOCK
COST OF GOODS SOLD
INVENTORY TURNOVER

2010
2011
2012
2013
2014
14,22,373
13,04,242
16,22,282
17,15,786
18,94,704
1,89,50,973
1,89,93,688
1,85,83,653
2,20,64,192
2,56,91,911

RATIO(Times)

7.50

6.86

8.72

7.77

7.37

INTERPRETATION:The Inventory Turn over Ratio decreased from 7.50% in 2010 to 6.86% in 2011. How ever, it
increased almost by 2% to 8.72% in 2012 but again had a gradual decrease to 7.77% in 2013 to further
decrease to 7.37% in 2014

INVENTORY TURNOVER RATIO

10

8.72
7.5

6.86

7.77

7.37
INVENTORY TURNOVER RATIO

6
4
2
0
2010

2011

2012

2013

2014

DEBTORS TURNOVER RATIO:An accounting measure used to quantify a firm's effectiveness in extending credit as well as
collecting debts. The receivables turnover ratio is an activity ratio, measuring how efficiently a firm uses
its assets.

47

FORMULA:-

RATIOS:YEARS
AVG ACC RECEIVABLE
CREDIT SALES
DEBTPRS
TURNOVER
RATIO(Times)

2010
2011
2012
2013
2014
18,86,273
14,49,151
19,99,827
19,71,659
20,36,232
1,89,50,973
1,89,93,688
1,85,83,653
2,20,64,192
2,56,91,911
10.04

13.10

9.29

11.19

12.61

INTERPRETATION:The Debtors Turn Over Ration was 10.04% in 2010 which has increased to 13.10% in 2011 but then
it was decreased drastically in 2012 to 9.29% but slowly is accelerating from 2013 on wards to 11.19 in
2013-14 and 10 12.61 in 2014.

DEBTORS TURNOVER RATIO

14
12
10
8
6
4
2
0

13.1
11.19

10.04

2010

12.61

9.29

2011

DEBTORS TURNOVER
RATIO

2012

2013

CREDITOR TURNOVER RATIO:-

48

2014

A short-term liquidity measure used to quantify the rate at which a company pays off its
suppliers. Accounts payable turnover ratio is calculated by taking the total purchases made from suppliers
and dividing it by the average accounts payable amount during the same period.

FORMULA:-

RATIOS:YEARS
AVG ACC PAYABLE
CREDIT PURCHASE
CREDITOR TURNOVER
RATIO(Times)

2010
2011
2012
2013
2014
19,56,505
15,03,072
22,42,583
21,13,778
22,13,218
1,66,83,797
1,66,15,326
1,63,88,564
1,86,40,995
2,08,01,139
8.52

11.05

7.30

8.82

INTERPRETATION:The creditor turn over ratio is 8.52% in 2010 which increased to 11.05% in 2011 but decreased to
7.30% I 2012 and then picked up to 8.82% in 2013 and increased in 2014 to 9.39%.

CREDITOR TURNOVER RATIO

12
10
8
6
4
2
0

11.05
8.52

2010

7.3

2011

2012

8.82

9.39

2013

2014

CREDITOR TURNOVER
RATIO

FIXED ASSET TURNOVER RATIO:A financial ratio of net sales to fixed assets. The fixed-asset turnover ratio measures a company's
ability to generate net sales from fixed-asset investments - specifically property, plant and equipment

49

9.39

(PP&E) - net of depreciation. A higher fixed-asset turnover ratio shows that the company has been more
effective in using the investment in fixed assets to generate revenues.

FORMULA:-

RATIOS:YEARS
FIXED ASSET

2013

NET SALES
FIXED ASSET TURNOVER
RATIO(Times)

2012

1,85,19,532
1,89,50,973
0,98

2011

1,74,96,977
1,89,93,688
0.92

2010

1,68,66,075
1,85,83,653
0.91

2009

1,97,65,611
2,20,64,192

4,14,37,473
2,56,91,911

0.89

INTERPRETATION:The fixed asset ratio was 0.98 % in 2010 which decreased to 0.92% in 2011 and further decreased
to 0.91 in 2012 and then to 0.89% in 2013. The fixed asset has shown a increasing trend in 2014 to 1.
61% This is far more than what it has been since 2010.

FIXED ASSET TURNOVER RATIO

2
1.5
1
0.5
0
2010

2011

2012

50

2013

2014

1.61

Concept of Working Capital Management

`There are two concepts of working capital viz.quantitative and qualitative. Some people
also define the two concepts as gross concept and net concept. According to quantitative concept,
the amount of working capital refers to total of current assets. What we call current assets?
Smith called, circulating capital. Current assets are considered to be gross working capital in
this concept. The qualitative concept gives an idea regarding source of financing capital Current
assets It is rightly observed that Current assets have a short life span. These type of Current
assets It is rightly observed that Current assets have a short life span.
These type of assets are engaged in current operation of a business and normally used for
short term operations of the firm during an accounting period i.e. Within twelve months. The
two important characteristics of such assets are, (i) short life span, and (ii) swift transformation
into other form of assets. Cash balance may be held idle for a week or two, account receivable
may have a life span of 30 to 60 days, and inventories may be held for 30 to 100 days.4
Fitzgerald defined current assets as, cash and other assets which are expected to be converted in
to cash in the ordinary course of business within one year or within such longer period as
constitutes the normal operating cycle of a business.53Current liabilities The firm creates a
Current Liability towards creditors (sellers) from whom it has purchased raw materials on credit.
This liability is also known as accounts payable and shown in the balance sheet till the payment
has been made to the creditors The claims or obligations which are normally expected to mature
for payment within an accounting cycle are known as current liabilities.
These can be defined as those liabilities where liquidation is reasonably expected to
require the use of existing resources properly classifiable as current assets, or the creation of
other current assets, or the creation of other current liabilities.6ets are engaged in current
operation of a business and normally used for short term operations of the firm during an
accounting period i.e. within twelve months. The two important characteristics of such assets are,
(i) short life span, and (ii) swift transformation into other form of assets. Cash balance may be
held idle for a week or two, account receivable may have a life span of 30 to 60 days, and
inventories may be held for 30 to 100 days.4 Fitzgerald defined current assets as, cash and
other assets which are expected to be converted in to cash in the ordinary course of business
within one year or within such longer period as constitutes the normal operating cycle of a
business.53Current liabilities The firm creates a Current Liability towards creditors (sellers)
from whom it has purchased raw materials on credit. This liability is also known as accounts
payable and shown in the balance sheet till the payment has been made to the creditors. The
claims or obligations which are normally expected to mature for payment within an accounting
cycle are known as current liabilities. These can be defined as those liabilities where liquidation
is reasonably expected to require the use of existing resources properly classifiable as current
assets, or the creation of other current assets, or the creation of other current liabilities.

51

Working capital
Definitions
The cash available for day-to-day operations of an organization is called working capital.
Strictly speaking, one borrows cash (and not working capital) to be able to buy assets or to pay
for obligations. This is also called current capital.
Accounting:
Net liquid assets computed by deducting current liabilities from current assets. The
amount of available working capital is a measure of a firm's ability to meet its short-term
FORMULA:Working Capital = Current Assets Current Liabilities
RATIOS:-

YEAR
WORKING CAPITAL

2011

2012
1038765

2013
539615

2014
872370

1037021

INTERPRETATION:
The working capital in the year 2012 has decreased but by 2013-2014 there is an increase
in the working capital ratio from 539615 to 872370 and 87230 to 1037021 which shows that the
company has gained working capital in the year 2014 as it was on 2011

52

working capital
1200000
1000000
800000

working capital

600000
400000
200000
0
2011

2012

2013

2014

53

Working Capital Ratio

The working capital ratio is the same as the current ratio. It is the relative proportion of
an entity's current assets to its current liabilities, and is intended to show the ability of a business
to pay for its current liabilities with its current assets. A working capital ratio of less than 1.0 is a
strong indicator that there will be liquidity problems in the future, while a ratio in the vicinity of
2.0 is considered to represent good short-term liquidity.
To calculate the working capital ratio, divide all current assets by all current liabilities.
FORMULA:Current Assets
Current Liabilities
RATIOS:-

YEAR
WORKING CAPITAL
RATIOS

2011

2012
1.09

2013
1.04

2014
1.06

1.07

INTERPRETATION:
In 2011 the company had working capital of 1.09 and has drastically decreased to 1.04 in
2012.Though there is a gradual increase in 2013 by 1.06,in 2014 the company has1.07 of
working capital.

54

Working Capital Ratio

1.1
1.09
1.08
1.07
1.06
1.05
1.04
1.03
1.02
1.01

Working Capital Ratio

2011

2012

2013

2014

55

Working Capital Productivity

The working capital productivity measurement compares sales to working capital. The
intent is to measure whether a business has invested in a sufficient amount of working capital to
support its sales. From a financing perspective, management wants to maintain low working
capital levels in order to keep from having to raise more cash to operate the business. This can be
achieved by such techniques as issuing less credit to customers, implementing just-in-time
systems to avoid investing in inventory, and lengthening payment terms to suppliers.
To decide whether the working capital productivity ratio is reasonable, compare a
company's results to those of competitors or benchmark businesses.
To derive working capital productivity, divide annual revenues by the total amount of
working capital.
FORMULA:Annual revenue
Total Working capital
RATIOS:year

2011

2012

2013

2014

Working Capital 7.47

Productivity

16.31

10.39

10.04

INTERPRETATION:
This ratio shows that in 2011 the company has 7.47 and has increased the in 16.31 that
shows that there is not much of working capital in the year 2012 invested to support the
productivity of the company but over the year 2013 and 2014 there is lot of working capital
invested in the productivity of the company.

56

working capital productivity

20
15

working capital
productivity

10
5
0
2011

2012

2013

2014

57

Working Capital Sales Ratio

It usually takes a certain amount of invested cash to maintain sales. There must be an
investment in accounts receivable and inventory, against which accounts payable are offset.
Thus, there is typically a ratio of working capital to sales that remains relatively constant in a
business, even as sales levels change.
The mechanism for showing management the results of its decisions related to working
capital.
The sales to working capital ratio is calculated by dividing annualized net sales by
average working capital
Management should be cognizant of the problems that can arise if it attempts to alter the
outcome of this ratio. For example, tightening credit reduces sales, shrinking inventory may also
reduce sales, and lengthening payment terms to suppliers can lead to strained relations with
them.

FORMULA:Annualized net sales

Accounts receivable + Inventory - Accounts payable
RATIOS:year

2011

2012

2013

2014

Working Capital
Sales Ratio

3.98

4.30

4.55

4.29

INTERPRETATION:
There is much amount of accounts receivables, inventory into the business that extracts
sales in the year 2011.In 2012 there is relatively less amount of accounts receivables, inventory
invested in the business and the position remains the same in the year 2013 but in 2014 it clearly
depicts that there is certain amount of accounts receivables, inventory induced into the business.

58

working capital sales ratio

4.6
4.5
4.4
4.3
4.2
4.1
4
3.9
3.8
3.7
3.6

working capital sales

ratio

2011

2012

2013

2014

Working Capital Turnover Ratio

The working capital turnover ratio measures how well a company is utilizing its working
capital to support a given level of sales. Working capital is current assets minus current
liabilities. A high turnover ratio indicates that management is being extremely efficient in using a
firm's short-term assets and liabilities to support sales. Conversely, a low ratio indicates that a
business is investing in too many accounts receivable and inventory assets to support its sales,
which could eventually lead to an excessive amount of bad debts and obsolete inventory.
Working Capital Turnover Formula
To calculate the ratio, divide net sales by working capital (which is current assets minus
current liabilities). The calculation is usually made on an annual or trailing 12-month basis, and
uses the average working capital during that period.
Issues with the Measurement
An extremely high working capital turnover ratio can indicate that a company does not
have enough capital to support it sales growth; collapse of the company may be imminent. This
is a particularly strong indicator when the accounts payable component of working capital is very
high, since it indicates that management cannot pay its bills as they come due for payment.

59

An excessively high turnover ratio can be spotted by comparing the ratio for a particular
business to those reported elsewhere in its industry, to see if the business is reporting outlier
results.

Net sales
(Beginning working capital + Ending working capital) / 2
RATIOS:year

2011

2012

2013

2014

Working Capital
Turnover Ratio

11.42

23.54

31.25

26.91

INTERPRETATION:

In 2011 the company has utilized good amount of working capital into the business
towards sales. In 2012 -2013 there is not much utilization of working capital into the business
but in 2014 the company has started to invest in working capital towards the working of the
company.

WorkingCapital Turnover Ratio

35
30
25
WorkingCapital Turnover
Ratio

20
15
10
5
0
2011

2012

2013

2014

60

Comparative Statement Of The Company For The Year 2013 And2014

PARTICULARS
2014
2013 Amt
%
Assets
Cash and cash equivalents
2258470
2284583
-26113 (1.16)
Short-term investments
1793165
1225435
567730 31.66
Total cash
4051635
3510018
541617 13.37
Receivables
1886273
1449151
437122 23.17
Inventories
1422373
1304242
118131 8.31
Deferred income taxes
632164
605884
26280 4.16
Prepaid expenses
511284
517454
-6170 (1.21)
Other current assets
4569875
4443006
126869 2.78
Total current assets
13073604 11829755 1243849 9.51
Gross property, plant and equipment
17093748 16611349
482399 2.82
Accumulated Depreciation
-10382847 10302189
-80658 0.78
Net property, plant and equipment
6710901
6309160
401741 5.99
Equity and other investments
4135599
5398518 -1262919 (30.54)
Other long-term assets
6429183
6280733
148450 2.31
Total non-current assets
17275683 17988411 -712728 (4.13)
Total assets
30349287 29818166
531121 1.75
Liabilities
Short-term debt
5497997
5951836 -453839 (8.25)
Accounts payable
1956505
1503072
453433 23.18
Taxes payable
153387
112801
40586 26.46
Accrued liabilities
1735930
1773233
-37303 (2.15)
Other current liabilities
1342395
1450048 -107653 (8.02)
Total current liabilities
10686214 10790990 -104776 (0.98)
Long-term debt
7015409
6449220
566189 8.07
Deferred taxes liabilities
813221
810127
3094 0.38
Accrued liabilities
678677
668022
10655 1.57
Minority interest
570720
587653
-16933 (2.97)
Other long-term liabilities
225323
179783
45540 20.21
Total non-current liabilities
9303350
8694805
608545 6.54
Total liabilities
19989564 19485795
503769 2.52
Additional paid-in capital
898381
902810
-4429 (0.49)
Retained earnings
11568602 11835665 -267063 (2.31)
Treasury stock
-1260425 -1261383
958 (0.08)
Accumulated other comprehensive
-846835 -1144721
297886 (35.18)
Total stockholders' equity
10359723 10332371
27352 0.26
Total liabilities and stockholders' eq 30349287 29818166
531121 1.75
Common Size Statement Of The Company For The Year 2013 And2014
PARTICULARS
2014
2013
Assets
Cash and cash equivalents
2258470 7.44
2284583 7.66
Short-term investments
1793165 5.91
1225435 4.11
Total cash
4051635 13.35
3510018 11.77
Receivables
1886273 6.22
1449151 4.86
Inventories
1422373 4.69
1304242 4.37
Deferred income taxes
632164 2.08
605884 2.03
Prepaid expenses
511284 1.68
517454 1.74
Other current assets
456987561 15.06
4443006 14.90
Total current assets
13073604 43.08
11829755 39.67
Gross property, plant and
equipment
17093748 56.32
16611349 55.71

FINDINGS:

There is a fluctuation in the gross profit ratio. The percentage of gross profit over sales is
gradually decreasing till 2012 and after which it is increased to 15.51 and 19.03 in 2013 and
2014. Thus it show an increasing trend from 2013 onwards. It is also apparent that the GP ratio is
increasing about 4% from 2012-2013(11.81%-15.51%) and 2013-2014(15.51-19.03%), Hence it

can be stimulated that between 2014 and 2015 there may be an increase in GP ratio of at least 4
The Net Profit Ratio was 9.17% in 2010 which increased slightly to 9.30% in 2011.There is a
decrease in Net profit Ration in 2012 to 8.19%. How ever, there is a increase of almost 3% in Net
Profit Ration between 2013-2013 when it was 11.47%. Similarly there is an increase of 3% again

for the next consecutive year in 2014 where the Net Profit Ration was 14.44%
There is a fluctuation in the current ratio from 1.22 %in 2010 to 1.09% in 2011 to a decrease in
2012 to 1.94 and then an increase in 2013 to 1.06 and consecutively an increase again to 1.07 in

2014. But the current asset is well enough to meet current liability.
The liquid Asset ratio was 1.04 in 2010 which has shown a gradual decrease to 0.92 % in 2011 to
further decrease to 0.86% in 2012. Between 2012-2013 and 2013-2014 the Liquid Asset Ratio has

remained stable at 0.89 % in both the financial years.

The Inventory Turn over Ratio decreased from 7.50% in 2010 to 6.86% in 2011. How ever, it
increased almost by 2% to 8.72% in 2012 but again had a gradual decrease to 7.77% in 2013 to

further decrease to 7.37% in 2014.

The Debtors Turn Over Ratio was 10.04% in 2010 which has increased to 13.10% in 2011 but
then it was decreased drastically in 2012 to 9.29% but slowly is accelerating from 2013 on wards

to 11.19% in 2013-14 and 10 12.61 in 2014.

The creditor turn over ratio is 8.52% in 2010 which increased to 11.05% in 2011 but decreased to

7.30% I 2012 and then picked up to 8.82% in 2013 and increased in 2014 to 9.39%.
The fixed asset ratio was 0.98 % in 2010 which decreased to 0.92% in 2011 and further decreased
to 0.91 in 2012 and then to 0.89% in 2013. The fixed asset has shown a increasing trend in 2014
to 1. 61% This is far more than what it has been since 2010.

The working capital in the year 2012 has decreased but by 2013-2014 there is an increase
in the working capital ratio from 539615 to 872370 and 87230 to 1037021 which shows
that the company has gained working capital in the year 2014 as it was on 2011
In 2011 the company had working capital of 1.09 and has drastically decreased to 1.04 in
2012.Though there is a gradual increase in 2013 by 1.06, in 2014 the company has1.07 of
working capital

62

There is a fluctuation in the liquid ratio. The liquid assets are gradually decreasing in the
year 2012 from .92 - .86. From the year 2013 there is no change in the liquidity position
of the company which is .89 in 2013 and 2014
This ratio shows that in 2011 the company has 7.47 and has increased the in 16.31 that
shows that there is not much of working capital in the year 2012 invested to support the
productivity of the company but over the year 2013 and 2014 there is lot of working
capital invested in the productivity of the company.
The amount of accounts receivables, inventory into the business extracts less sales in the
year 2011. In 2012 there is relatively less amount of accounts receivables, inventory
invested in the business and the position remains the same in the year 2013 but in 2014 it
clearly depicts that there is certain amount of accounts receivables, inventory induced
into the business.
In 2011 the company has utilized good amount of working capital into the business
towards sales. In 2012 -2013 there is not much utilization of working capital into the
business but in 2014 the company has started to invest in working capital towards the
working of the company.

63

SUGGESTIONS:
1) Toyota should continue to undertake concerted efforts to strengthen its management platform
and raise corporate value.
2) As immediate tasks, Toyota should promote business and cost structure reforms to realize a
solid management platform so that it can respond quickly to the changing market circumstances.
Specifically, Toyota should maintain a streamlined structure through the reduction of fixed costs
and enhance its business in established markets in developed countries.
3) Toyota should accelerate its business expansion into rapidly growing emerging countries by
thoroughly and meticulously monitoring market conditions in respective regions and introducing
products suited to the characteristics and needs of each market. Toyota should also strive to
establish production and supply structures to realize optimum product pricing and delivery, and
to enhance the value chain to provide a wide range of customer services in each country and
region.
4) Toyota should consider making Lexus a priority in the Chinese market. This will enable it to
become competitive with other car manufacturers in the luxury segment. By increasing
production facilities in Asia, this will enable Toyota to have cheaper delivery channels and
become closer to the emerging market customer. Toyota should also cut out layers of middle
management so that engineers get more authority over what specific customer needs are
answered in the design and development of a new car.
5) Toyota should pursue the development of environmentally conscious, energy-saving products
while incorporating functions and services demanded by customers (value chain) and delivering
them to the global market. Acting on these measures, Toyota should aim for growth in three
business units, namely, solutions in the areas of materials handling equipment, logistics and
textile machinery; key components in the fields of car air-conditioning compressors and car
electronics; and mobility in the domains of vehicles and engines.
6) To support consolidated management on a global scale, Toyota should enhance the power of
the workplace and diversity in the use of human resources, and strive to nurture global human
resources.
7) In addition to placing top priority on safety, Toyota should thoroughly enforce compliance,
including observance of laws and regulations, and actively participate in social contribution
activities.
8) Toyota should aim to support industries and social infrastructures around the world by
continuously supplying products and services that anticipate customers needs in order to
contribute to engendering a compassionate society.
64

Conclusion
Study of ratio analysis of Toyota reveals the financial performance of the company. It is
found from analysis of the four financial years from 2010 to 2014, the companys Gross Profit
has increased in 2013-14 and so is the Net Profit. The Current Ratio is also increasing since 2013
14 and 2014-15 and that the current assets are more than sufficient to meet the current liability.
The ideal liquidity ratio needs to be at least 1: 1 but it is only 0.89% which is low. Hence the
company needs to improve its liquidity position. The Inventory Turnover Ratio decreased from
which means that stock is sold out or utilized by the company. However, it increased almost by
2% to 8.72% in 2012 where there may have been less sales and stock increase, but again had a
gradual decrease to 7.77% in 2013 to further decrease to 7.37% in 2014 which shows very
clearly that Toyota is increasing its sales and thus reducing its stock which is a very positive
trend for the company. Since both the Debtors turnover ratio and the Creditor turnover ratio is
both showing the same trend of from increased trend to an decreased trend, it clearly implies that
the company is making sales but at the same time the companies burrowing is also increasing.
The positive side of the finance of Toyota is that since the sale is going up, the company is in a
position to repay it loans and borrowings comfortably.
The very clear indicator that the company is on the positive trend is its fixed asset ratio.
In Toyota, the fixed assets are increasing which means that the company is buying raw materials
and assets required for the growth. There is money available and hence the company is able to
increase it fixed assets and through this the company can increase its overall financial position.
The working capital was not utilized in 2012 but it has been utilized in 2013 and 2014 and this
has resulted in the productivity of the company. Thus it is very apparent that working capital
needs to be utilized to increase the productivity of the company. The liquidity assets show a
declining trend in 2011-12 and the company is trying to maintain it liquidity assets in 2013-14
but this needs to be strengthen even further. Although the accounts receivables is high the money
has not be utilized to increase productivity. The working capital of the company needs to be
utilized to increase productivity and profitability of the company. The company has started to
utilize this and hence we can anticipate that the company will have more productivity and the
65

financials will improve further. We can conclude by saying the company is moving towards a
very positive trend and 2014-2015 will be a productive year for the company.

66