PRESENTED BY:

Grace

Mai

Tram

Kelsang
About:
• Founded in 1937 by Kiichiro Toyoda
• Toyota first arrived in United States in 1957
• A multinational automobile company serving global consumers
• Formed world’s first mass-market hybrids
Business Strategies:
• Offer competitive rates compared to other automobile companies
• Ensures supreme quality of its manufactured products
• Extending its business world-wide through setting up training centers to impart knowledge
about car assembling and managing
Risks:
• Strong Competitors
• Lacks innovativeness in products instead focus over launching attractive vehicles
• Due to a huge global network, it focuses less over that is less useful in terms of quality, safety
and reliability
•About
• A German automobile company founded by August Horch in 1899
• Offers designing, engineering services and production of luxury vehicles
•Business Strategies
• Operates over the mission - "delight customers world-wide”
• To follow mission it has defined innovation, created experiences, lived
responsibility and shaped Audi
• Targets mainly Asian countries and the ones who responds better like North
America and Europe
• Works continuously to improve gas mileage and sustainability of its vehicles
•Risks
• Tough competition in the market
• Not following the trends of the industry much like innovation and environmental
friendliness
•About
• An automobile company that manufactures electric vehicles
• And generates accessible clean energy and storage products
•Business Strategies
• Produces limited quantity high-end electric vehicles that are environmentally friendly
• Unique business model emphasizes upon control over sales and services to break the
monopoly of automobile giants
• Targets high-class customers through perfect vehicles; now planning to introduce
affordable innovative cars for the masses
•Risks
• Setting up charging stations for electric vehicles was a great challenge initially
• Other tech companies like Google or Apple may enter the industry
% of Total Assets (receivables)_2017
● Accounts receivable/ total assets *100
○ Audi AG: $6.74B/$66.13B*100 = 10.19%
○ Tesla: $515,381/$28,655,372*100 = 1.798%
○ Toyota: $78,520,000/$437,496,000*100 = 17.497%
% of Total Assets (inventories)_2017

Inventories/Total Assets *100

Audi AG = $7.89B/$66.13 *100 = 11.93%
Tesla = $2,263,537/$28,655,372 *100 = 7.9%
Toyota = $21,436,000/$437,496,000 *100 = 4.9%
Long-Lived Assets
The Allowance for Doubtful Accounts
Financial Analysis
Industry Ratio
 Inventory Analysis – Audi AG
Audi AG (EUR Million)
2017 2016 2015
• Inventory turnover ration goes down from Cost of Goods Sold 50,545 49,390 47,043
8.26 to 6.68. Implies weak sales. Inventory 7,893 7,233 6,317
• “Notice of Violation” from the U.S. Inventory Turnover Ratio = Cost of
Goods Sold / Average Inventory 6.68 7.29 8.26
Environmental Protection Agency (EPA) Industry Inventory turnover ratio
regarding Nitrogen oxide emission in relation (average) 10.39 8.01 9.50

to diesel engines of type V6 3.0 TDI on

9/18/2015
• Stop sales of all affected models in the US &
Canada
• Constantly below Industry ratio
• Gap increases to 3.71 in 2017
 Inventory Analysis - Toyota Toyota (Yen Million)
2017 2016 2015
Inventory Turnover Ratio goes down from Cost of Goods Sold 21,543,035 21,456,086 20,916,362
10.37 to 9.68 Inventory 2,388,617 2,061,511 2,137,618

• CGS increased 539.7 billion, 2.58% during Inventory Turnover Ratio = Cost of
Goods Sold / Average Inventory 9.68 10.22 10.37
2016 Industry Inventory turnover ratio
• Inventory decreased 4% 2016 vs 2015 (average) 10.39 8.01 9.50

• CGS increased 86.9 billion, 0.4% during

2017
• Inventory increased 16% 2017 vs 2016

Inventory Turnover Ratio vs. Industry

Averages
• Better in 2015 & 2016
• slightly below in 2017
 Inventory Analysis - Tesla Tesla (USD Million)
2017 2016 2015
Cost of Goods Sold 9,536 5,401 3,123

• Inventories are stated at lower of the Inventory

Inventory Turnover Ratio = Cost of
2,264 2,067 1,278

cost or market on first-in first-out basis Goods Sold / Average Inventory 4.40 3.23 2.80
Industry Inventory turnover ratio
• The restoration or increase in value of (average) 10.39 8.01 9.50
inventories is not allowed
• The increase in finished goods
inventory was due to customer orders
in transit for delivery
• Inventory turnover ratio increases
steadily
• Indicates the efficiency of utilizing
inventory to generate revenue is
improved
• Much lower than industry averages
 Inventory Analysis – Audi vs Toyota vs Tesla

Conclusion: Toyota is the best of the

three companies
Toyota’s Inventory Turnover Ratio is
better then the industry averages
 Long-Lived Assets Analysis – Audi AG
Audi AG (EUR Million)
• PPE slightly increase 2017 2016 2015
Net Sales 60,128 59,317 58,420
• Turnover ratio decrease due to assets Fixed Assets 13,660 12,591 11,380
under construction Fixed Asset Tournover Ratio = Net
Sales / Average Net Fixed Assets 4.58 4.95 5.55
• Indicate inefficiency in managing fixed
asset investments
 Long-Lived Assets Analysis – Toyota
• 2016: 1.26 ↓
• Sales ↑4.29%, ¥1,168 B Toyota (Yen Million)
2017 2016 2015
• FA ↑ 6%, ¥1,542B
Net Sales 27,597,193 28,403,118 27,234,521
Fixed Assets 23,649,094 22,776,641 22,364,429
• 2017: 1.19 ↓ Fixed Asset Tournover Ratio = Net
• Sales ↓2.84%, ¥805.9 B Sales / Average Net Fixed Assets 1.19 1.26 1.29
• FA ↑3.83%, ¥872 B

• Stable in general
• Impairment test conducted based on carrying value &
fair value
 Long-Lived Assets Analysis – Tesla
Tesla (USD Million)
• PPE are recognized at cost less accumulated 2017 2016 2015
depreciation Net Sales
Fixed Assets
11,759
10,028
7,000
5,983
4,046
3,403
• Depreciation basis: Straight-line method Fixed Asset Tournover Ratio = Net
Sales / Average Net Fixed Assets 1.47 1.49 1.55
over estimated useful lives
• Land is not depreciated
• Depreciation for tooling is computed using
the units-of production method
• Impairment conducted if incurred
• The recovery of impairment losses won’t be
recorded
 Long-Lived Analysis – Audi vs Toyota vs Tesla
Audi AG (EUR Million) Toyota (Yen Million) Tesla (USD Million)
2017 2016 2015 2017 2016 2015 2017 2016 2015
Net Sales 60,128 59,317 58,420 27,597,193 28,403,118 27,234,521 11,759 7,000 4,046
Fixed Assets 13,660 12,591 11,380 23,649,094 22,776,641 22,364,429 10,028 5,983 3,403
Fixed Asset Tournover Ratio = Net
Sales / Average Net Fixed Assets 4.58 4.95 5.55 1.19 1.26 1.29 1.47 1.49 1.55

Conclusion: Audi’s FA turnover ratio is

the best
Which means its efficiency in managing
fixed asset investment to generate sales
is the best
 Investment Decision -Liquidity and Efficiency
Analysis
Audi AG Toyota Tesla Result
2017 2016 2015 2017 2016 2015 2017 2016 2015 Best Middle worst
Liquidity and Efficiency
Current Ratio 1.60 1.56 1.43 1.13 1.03 1.13 0.86 1.07 0.99 Audi Toyota Tesla
Quick Ratio 1.13 1.14 1.03 0.85 0.86 0.85 0.53 0.69 0.49 Audi Toyota Tesla
Accounts receivable turnover 2.89 3.30 3.77 3.35 3.46 3.29 5.80 5.24 5.11 Tesla Toyota Audi
Inventory turnover 6.68 7.29 8.26 9.68 10.22 10.37 4.40 3.23 2.80 Toyota Audi Tesla
Days' sales uncollected 34 30 26 28 26 28 16 26 15 Tesla Toyota Audi
Days' sales in inventory 57 53 49 40 35 37 87 140 149 Toyota Audi Tesla
Total asset turnover 0.24 0.25 0.27 0.14 0.15 0.15 0.11 0.11 0.15 Audi Toyota Tesla
 Investment Decision – Solvency Analysis
Audi AG Toyota Tesla Result
2017 2016 2015 2017 2016 2015 2017 2016 2015 Best Middle worst
Solvency
Debt ratio 55.76% 58.41% 61.63% 60.18% 63.43% 54.93% 80.34% 73.91% 86.29% Audi Toyota Tesla
Equity ratio 44.24% 41.45% 38.37% 34.35% 35.40% 30.31% 14.79% 20.97% 13.50% Audi Toyota Tesla
Debt-to-equity ratio 126.05% 140.93% 160.64% 175.19% 179.19% 181.20% 352.42% 352.42% 639.29% Audi Toyota Tesla
Times interest earned 37.26 7.99 145.78 73.74 83.27 125.48 (5.69) (4.75) (8.22) Toyota Audi Tesla
 Investment Decision – Profitability & Market
Prospects
Audi AG Toyota Tesla Result
2017 2016 2015 2017 2016 2015 2017 2016 2015 Best Middle worst
Profitability
Profit margin ratio 5.79% 3.48% 7.36% 6.64% 8.14% 7.98% -16.68% -9.64% -21.96% Toyota Audi Tesla
Gross margin ratio 15.94% 16.74% 19.47% 21.94% 24.46% 23.20% 18.90% 22.85% 22.82% Toyota Audi Tesla
Return on total assets 1.39% 0.88% 2.00% 0.95% 1.22% 1.22% -1.91% -1.10% -3.20% Toyota Audi Tesla
Return on common stockholder's equity 3.25% 2.19% 5.24% 2.67% 3.45% 3.48% -10.91% -5.78% -22.27% Toyota Audi Tesla
Basic earnings per share(USD) 99.23 55.39 117.34 5.57 6.82 6.33 (11.83) (4.68) (6.93) Audi Toyota Tesla
Market Prospects
Price-earnings ratio 8.86 13.66 6.89 22.83 17.18 19.47 (26.32) (45.66) (34.63) Audi toyota Tesla
Market stock price (USD) 879.6 756.516 808.716 127.17 117.2 123.22 311.35 213.69 240.01
Stock Market Chart – Audi vs Toyota vs Tesla vs NASDAQ
Investment Decision
Toyota:

High profitability
Good liquidity and efficiency & solvency
Reasonable stock price & price-earning
ratio
Twice a year dividends
Any Question?
THE END