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Article

TOYOTA MOTOR HIT THE BEST PERFORMANCE
( Rank 1 in Industry- Motor Vehicle  , Rank 5 in Global  Fortune 500 )
 
“ Toyota, as a leader in hybrid – electric vehicles pushed past its American
rivals on this year’s list “
 
By: Hendra S Raharjaputra,MBA
Executive Director of HSFAMES GLOBALMINDS
 
      
      
 
       While the giant automaker , General Motor , beg America Government to bail out its huge debt, Toyota Motor harvested Net Income US$ 17,146 Million ( March 3rd 2008 ) , Stock Price US$ 66.41 ( + 0.79 %/ + 1.20 % in Jan 6 , 2009 ). At the same time the stock price of GM was US$ 3.94 ( + 0.23 % ), loss amount to US$ 21,264 ( Q1 up to Q3 year 2008  )
 
       This article written focus on financial performance of both companies that will give the opportunity for the readers involve in sharing to analyze the companies, and giving opinion .
 
LIQUIDITY RATIO AND LEVERAGE – 2007
 
 
TOYOTA MOTOR
GENERAL MOTOR
CURRENT RATIO
1.01X
0.89x
QIUCK RATIO
0.76X
0.49x
DEBT RATIO
6.34 %
125%
DEBT TO EQUITY RATIO
175.5 %
US $ Mill 37,094
 

ACTIVITY RATIO AND PROFITABILITY- 2007
 
 
TOYOTA MOTOR
GENERAL MOTOR
INVENTORY TURN OVER
11.9 x
5.9 x
RECEIVABLE TURN OVER
4.23 x
20.27
OPERATING PROFIT MARGIN
10.3 %
Loss ( US$ Mill. 5.729 )
OPERATING ASSETS TURN OVER
0.81 x
1.21 x
RATE OF RETURN
8.34 %
Minus/ Loss
GROSS MARGIN
23.8 %
12 %
INTEREST EXPENSES/INCOME
US$ Mill 460/1,654
US$ Mill  2,902/2,284
 
 
Note :
-          General Motor’s Equity hit on minus 37,094 ( in red ).
-          General Motor  has Gross Margin 12 %, lower almost a half part of TOYOTA MOTOR ( 23.8 % )  , that make General Motor suffered loss.
-          General Motor has good performance in managing its assets / Operating Assets Turn Over 1.21 x , proved by maximize its assets better than TOYOTA
 
Conclusion  :
-          In 2007  Toyota Motor’s Total Revenue increased almost 29 % , while General Motor dropped 12 %. In some marketplaces Toyota Motor took over market share’s General Motor.
-          Toyota Motor had more productive operations , proved by better Gross Margin 23.8 %.
-          In 2006 General Motor has indicated “ Problem of Cash Flow “, it’s pictured in the balance sheet , Equity went down from minus( - ) US$ Mill 5,652 ( 2006 ) to minus ( - ) US$ Mill 37,094 ( 2007 ).
 
In my opinion , General Motor could retain its operation ( 2006 and 2007 ) by using the rest of gross margin and Cash - In flow from depreciation , but it failed to improve its revenue / total sales and Cost of Sales  , caused  by Toyota Motor seemed more aggressive to take over GM’s Market Share. The factors were possibly technology ( hybrid - electric vehicle ) , fashionable model ,competitive  price those made Toyota Motor leading.


Jan 2009
 
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