Toyota Ratio
ROE： ROE= Net income/ average stockholders’ equity 2011 2010 2009
ROE 2.69% 3.95% 2.02%
This comparison shows that Toyota’s performance in 2011 as measured by its ROE has improved compared to 2009. It suggests that the company has been effective during the time period.
ROA: ROA= (Net income+ interest expense net of tax)/ average total assets 2011 2010 2009
ROA 1% 1.47% 0.8%
This comparison suggests that Toyota has been increasingly effective on utilizing its total assets, for instances, its total investment.
Financial leverage percentage= ROE-ROA
2011 2010 2009 Financial leverage percentage 1.69% 2.48% 1.22%
In year 2009, the company have the lowest leverage ratio among the three years, thus it suggests that it utilizes relatively lowest debt in its capital structure this year, which indeed means Toyota has been investing most effectively (earning a high return on investment) or borrowing more effectively (paying a low rate of interest) in year 2009.
EPS=net income/ average number of shares of common stock outstanding 2011 2010 2009
EPS
Quality of income= cash flows from operating activities/ net income 2011 2010 2009
Quality of income 5.12 4.96 12.21
In the past three years, the quality of income ratio are always bigger than 1, this is considered to indicate Toyota’s high-quality earnings, because cash dollar of income is supported by one dollar or more of cash flow. And year 2009’s ratio is especially high, suggests that Toyota’s earning ability in 2009 is very high.
Profit margin= net income/ net sales revenue 2011 2010 2009 Profit margin 1.53% 2.15% 1.11%
For year 2010, each dollar of Toyota’s sales generated 2.15 cents of profit. In comparison, in year 2011, the ratio is 1.53, the
ROE 2.69% 3.95% 2.02%
This comparison shows that Toyota’s performance in 2011 as measured by its ROE has improved compared to 2009. It suggests that the company has been effective during the time period.
ROA: ROA= (Net income+ interest expense net of tax)/ average total assets 2011 2010 2009
ROA 1% 1.47% 0.8%
This comparison suggests that Toyota has been increasingly effective on utilizing its total assets, for instances, its total investment.
Financial leverage percentage= ROE-ROA
2011 2010 2009 Financial leverage percentage 1.69% 2.48% 1.22%
In year 2009, the company have the lowest leverage ratio among the three years, thus it suggests that it utilizes relatively lowest debt in its capital structure this year, which indeed means Toyota has been investing most effectively (earning a high return on investment) or borrowing more effectively (paying a low rate of interest) in year 2009.
EPS=net income/ average number of shares of common stock outstanding 2011 2010 2009
EPS
Quality of income= cash flows from operating activities/ net income 2011 2010 2009
Quality of income 5.12 4.96 12.21
In the past three years, the quality of income ratio are always bigger than 1, this is considered to indicate Toyota’s high-quality earnings, because cash dollar of income is supported by one dollar or more of cash flow. And year 2009’s ratio is especially high, suggests that Toyota’s earning ability in 2009 is very high.
Profit margin= net income/ net sales revenue 2011 2010 2009 Profit margin 1.53% 2.15% 1.11%
For year 2010, each dollar of Toyota’s sales generated 2.15 cents of profit. In comparison, in year 2011, the ratio is 1.53, the