Marketing Mix of Toyota Motor Corporation-Samples for Students

Question: Where and how does the firm get its current financing?". In particular, assess current financing of TMC. How does the firm currently raise equity? Answer: Based on the financial statements of the company i.e. TMC for FY2017, it is apparent that majority of the incremental funding for the company comes from raising debt that too in particular long term debt. With regards to equity, the majority component of equity belongs to the retained earnings which stand at 17,601 trillion yen out of the total shareholder equity of 18,123 trillion yen. Further considering the debt and equity as on March 31, 2017, it is apparent that the debt equity ratio of company is quite healthy ( 0.75 ) which allows the company to raise additional debt financing (TMC, 2017). Equity One of the mechanisms to raise equity is through the issue of AA class shares. These were first issued in the year 2015 and the relevant details are summarised below (TMC, 2017). The company has not raised any incremental capital in the last three financial year through the issue of common stock as indicated from the table below (TMC, 2017). However, the company tends to raise some funding through the issue of treasury stock as indicated below (TMC, 2017). However, typically only a limited financing is done in this manner and also these shares are repurchased from time to time and also some are retired. Debt The short term debt for the company comprises of bank loans and also commercial paper, the details of which are as highlighted below (TMC, 2017). The long term debt for the company consists of the following (TMC, 2017). Unsecured loans from banks Secured loans from banks Medium term notes issued by consolidated subsidiaries Unsecured notes issued by the parent company Unsecured notes issued by consolidated subsidiaries Secured notes issued by consolidated subsidiaries Capital lease obligations (long term) The break-up of the long term debt is indicated below (TMC, 2017). It is also apparent from the above details that the debt is floating and not fixed which is apparent from the altering interest rate from year to year. The currency breakup of the long term debt as on March 31, 2017 is indicated below (TMC, 2017). US Dollars (51%) Japanese Yen (11%) Australian Dollar (10%) Euros (9%) Other Currency (19%) Additionally, the expected amount due for maturity in the next five years for the company is as highlighted below (TMC, 2017). Reference TMC (2017), SEC Filings- Form 20-F, TMC website, [Online] available at https://www.toyota-global.com/pages/contents/investors/ir_library/sec/pdf/20-F_201703_final.pdf [Accessed August 22, 2017]