Toyota Motor Corporation (Toyota) is Japan’s largest and the world’s fourth-largest automobile manufacturer. The company offers well-known car models like Camry, Corona, Corolla and Lexus. Though a late entrant, compared to General Motors and Ford, Toyota has become one of the strongest players in the automobile industry.
Toyota has continued to set new benchmarks for providing value to customers more effectively than competitors. Toyota is exposed to market risk due to changes in currency rates, interest rates and certain commodity and equity prices.
In order to manage these risks, Toyota uses various derivative financial instruments. These instruments are in general executed only with creditworthy financial institutions. The case outlines the various financial risks Toyota faces and how the company manages them.
Introduction Toyota Motor Corporation (Toyota), Japan’s largest and the world’s fourth-largest automobile manufacturer offered well-known car models like Camry, Corona, Corolla, and Lexus.
Though a late entrant, compared to General Motors and Ford, Toyota had become one of the strongest players in the automobile industry.
In an industry, generally considered to be mature in terms of technology, Toyota had continued to set new benchmarks for providing value to customers more effectively than competitors. Toyota had also redefined the rules of the game in various areas – product development, manufacturing, vendor management and human resources management.
A recent Business Week issue had Toyota on the cover with the caption “Can anything stop Toyota?” Background Note Sakichi Toyoda, born in 1868, founded Toyota. He showed little interest in the family’s carpentry business. Instead, Toyoda concentrated on improving the handloom machinery used in textile factories.
These efforts led to the Toyoda Automatic Loom.
In 1926, Sakichi founded Toyoda Automatic Loom Works (TALW) to make looms. He entrusted his son Kiichiro with the task of using the profits from the textile machinery business to develop a motor car. In 1933, Kiichiro opened an auto department within the loom works and began copying US engine designs.
After Sakichi died in 1930, Kiichiro faced stiff competition from Ford and General Motors, who had set up their manufacturing units in Japan. Family members including brother Risaburo showed little interest in Kiichiro’s plans. In spite of these difficulties, the articles of association of the company were amended in 1933 to permit automobile manufacturing… Credit Risk
Toyota used various financial instruments, in the normal course of business. These instruments were in general executed only with creditworthy financial institutions. Virtually all foreign currency contracts were denominated in U.S. dollars, euros and other currencies of major industrialized countries… Market Risk
Toyota was exposed to market risk due to changes in currency rates, interest rates and certain commodity and equity prices. In order to manage these risks, Toyota used various derivative financial instruments… Derivative financial instruments: Accounting & Valuation
Toyota employed derivative financial instruments, including foreign exchange forward contracts, foreign currency options, interest rate swaps, currency swap agreements and interest rate options to manage its exposure to fluctuations in interest rates and foreign exchange rates…
Remember! This is just a sample.
You can get a custom paper by one of our expert writers.
Get your custom essay
Helping students since 2015
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download