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
Excerpts
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...
Exhibits
Exhibit I: Toyota: Consolidated Financial Highlights (US GAAP)
Exhibit II: Toyota: A Comparative Study
Exhibit III: Toyota: A Comparative Study
Exhibit IV: Geographic Breakdown - RevenuesBr
Exhibit V: Fair Values
Annexure -A: Accounting for Financial Instruments under US GAAP
Buy this case study (Please select any one of the payment options)
| Price: Rs.500 |
Price: Rs.500 | PayPal (11 USD) |
