Trend Analysis of Toyota Company
Introduction
Toyota Motor Corporation is one of the largest motor products in the world. Even the company is at risk since most of it is financed using debt capital. Therefore the potential investors or the shareholders should always analyze the growth of this company. Therefore, the trend analysis of this company for the last four years that’s is from 2017-2020. Analyzing the trend of the company using the income statement, the following factors will be considered. The company’s total revenue is increasing for the first three years, but in the fourth year, it decreases. In 2017, the revenue was 27,597,193 and 2018 is 29,379,510, in 2019 is 30,225,681 and in 2020 is 29, 929,992. It’s an indication that the company’s sales are increases in every year except in 2020 when it decreases. The other factor the operating income or loss for the last four years; the trend is increasing. It’s because from 2017 to 2019, the value has been increasing as revenue has, but in 2020, the operating income decreases. The last factor to consider in the income statement is the net income of the company. The trend of the net income is not constant since, in the first two years, it increases from 2017, 1,831,109 up to 2018, where it rises to 2,493,983. While in 2019 it decreases to 1,868,085 but in 2020 the value increases to 2,058,899.
Trend analysis of Toyota Company using the statement of financial position for the last four years. The announcement of the economic situation is the statement that determines the financial position of the company. It’s the statement that identifies all the assets the company has liability as well as its finances. The asset value for the company is increasing continually from 2017 to 2020. It indicates that the firm is growing and moving in a positive direction. But as the assets increase the same way, the liability of the company is rising also. The ordinary shares of the company are decreasing since the company’s shares are affected by the effect of dilution of shares, while the treasury number of the shares is increasing.
In the next analysis, I will determine the debt-equity ratio, liquidity ratio, and asset return. It will help me to decide whether or not I will be a potential shareholder of the Toyota Motor Corporation.
Reference
https://finance.yahoo.com/quote/TM/balance-sheet?p=TM