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Module 3: Market Multiple Valuation. Mairin Talerico. Snapshot of Toyota. Limited liability, joint-stock company incorporated under Commercial Code of Japan; started in 1930s Primarily in automotive industry, but also financial services and others Sold 9.98 million vehicles in fiscal 2013

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snapshot of toyota
Snapshot of Toyota

Limited liability, joint-stock company incorporated under Commercial Code of Japan; started in 1930s

Primarily in automotive industry, but also financial services and others

Sold 9.98 millionvehicles in fiscal 2013

Sell in 170 different countries and regions

Primary markets: Japan, North

America, Europe and Asia

toyota s enterprise value
Toyota’s Enterprise Value
  • Yahoo Finance Market Cap = $186.78 billion (compared to $406B)
  • Yahoo Finance EV = $332.37 billion (compared to $450B)
  •  Differences in shares outstanding issue 1.58B v 3.45B
epat multiple
EPAT Multiple

$173.68 > 117.88

Undervalued  Buy

Less: NFL = $43,917

nea multiple
NEA Multiple

TM’s multiple= 2.60

$117.88 > 72.81

Overvalued  sell

r d multiple
R&D Multiple

TM’s multiple= 32.40

$117.88 > 50.70

Overvalued  sell

advertising multiple
Advertising Multiple
  • TM’s multiple= 78.82

$117.88 > 0.92

Overvalued sell

comparison to honda motor company
Comparison to Honda Motor Company

The following multiples are calculated using only Honda as a comparable entity due to IFRS:

$117.88 > 45.76

Overvalued  sell

$117.88 > 50.58

Overvalued  sell

comparison to honda cont
Comparison to Honda Cont.

$117.88 > 47.20

Overvalued  sell

$117.88 > 46.29

Overvalued  sell

issues and takeaways
Issues and Takeaways
  • Discrepancy with shares outstanding between financial statements/Tokyo Stock Exchange & Yahoo Finance
    • 3.45B v 1.58B
  • Not confident in the multiples method
  • Multiples are inconsistent
  • Wide range of Equity values
  • Companies don’t appear very

comparable

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