BUSN369 W8 Course Project.docx - Global Finances Toyota Motor Corinne Maldonado June 23rd 2019 DeVry University BUSN 369 RUNNING HEAD GLOBAL FINANCES

BUSN369 W8 Course Project.docx - Global Finances Toyota...

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Global Finances: Toyota Motor Corinne Maldonado June 23 rd , 2019 DeVry University, BUSN 369
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RUNNING HEAD: GLOBAL FINANCES : TOYOTA MOTOR Table of Contents Exchange Rates .............................................................................................................................. 3 Figure 1: Value of U.S. Dollar Compared to Japanese Yen. (Google Search, 2019a) .............. 3 Figure 2: Value of Euro Compared to Japanese Yen. (Google Search, 2019b) ........................ 4 Sources of Funds ............................................................................................................................ 4 Stock Performance ......................................................................................................................... 5 Figure 3: TM Stock Price between June 2018 and June 2019. (NASDAQ, 2019) .................. 6 Accounting Practices ..................................................................................................................... 6 Figure 4: Toyota Motor Financial Summary, U.S. Generally Accepted Accounting Principles (Toyota Motor, 2018b) .............................................................................................................. 8 Financial Performance .................................................................................................................. 8 Figure 5: Dividends per Share by Fiscal Year (FY). (Toyota Motor, 2019) ............................. 9 Reference ........................................................................................................................................ 9 2
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RUNNING HEAD: GLOBAL FINANCES : TOYOTA MOTOR Exchange Rates Toyota Motor (Toyota) is an automotive company based out of the country Japan. Their unit of currency is the Japanese Yen (¥). This currency is the third most traded following the United States Dollar ($) and Euro (€). The Yen is followed by the British Pound (£) and Canadian Dollar ($) (Cook, 2019). When compared to a United States Dollar, it would take about ¥109 to equal $1. When compared to a Euro, it would take about ¥123 to equal €1. Figure 1: Value of U.S. Dollar Compared to Japanese Yen. (Google Search, 2019a) Figure 2: Value of Euro Compared to Japanese Yen. (Google Search, 2019b) 3
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RUNNING HEAD: GLOBAL FINANCES : TOYOTA MOTOR As with many international organizations Toyota is affected by exchange rates. There are many factors that go into changes of currency value such as inflation, politics, and foreign exchange rates. In 2017, Toyota reported a 39% profit loss despite an increase in international and domestic sales. There was a 23% drop in net income and worldwide revenue dropped 3.5%. One of the responsible causes is thought to be the Japanese Yen’s value increasing as compared to foreign currencies. Additionally, United States President Donald Trump is moving forward to increase tariffs on imported goods, specifically Mexico where Toyota has production plants. Toyota uses outsourcing to keep their prices competitive (Greimel, 2017). Toyota also struggles against ever changing foreign exchange rates. Even though sales within the United States rose, the offset of exchange rate losses resulted in significant operating losses. In Europe however, there is a more lenient exchange rate and growth in profits were
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