Financial Risk Management at Toyota

Case Code: FINA012 Case Length: 16 Pages Period: 2004 Pub Date: 2004 Teaching Note: Not Available

Price: Rs.500 Organization: Toyota Industry: Automobile Countries: Japan Themes: Banking and Financial Management, Microfinance

Abstract Case Intro 1 Excerpts

Abstract

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.

Contents

Introduction
Background Note
Credit Risk
Market Risk
Derivative financial instruments: Accounting & Valuation
Exhibits

Keywords

Toyota Motor Corporation, Toyota, Financial risk management, Sakichi Toyoda, Camry, Corona, Corolla, Lexus, US GAAP (generally accepted accounting principles), FAS 115, Hedging, Credit risk, Market risk, MBA case study, Strategy

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