Module 7 valuation using residual enterprise income
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Module 7 : Valuation Using Residual Enterprise Income. 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

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Module 7 : Valuation Using Residual Enterprise Income

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Module 7 valuation using residual enterprise income

Module 7: Valuation Using Residual Enterprise Income

Mairin Talerico


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 million vehicles in fiscal 2013

Sell in 170 different countries and regions

Primary markets: Japan, North

America, Europe and Asia


Auto manufacturing at a glance

Auto Manufacturing – At a Glance

TM

F

GM


Swot analysis

SWOT Analysis

Strengths

Opportunities

Research and Development initiatives

A leader in green cars development

Selling in Japan and North American markets

Geographically expansive manufacturing locations

Toyota Motor Credit Credit Corporation [49% US Sales had financing]

Develop environmentally friendly vehicles and technologies

Safe vehicles

Ability to increase market share in growing economies and markets

Sustainable growth and optimal supply of products globally

Finance more cars and increase profits

Growth through acquisitions


Swot analysis cont

SWOT Analysis Cont.

Weaknesses

Threats

Product recalls

Always staying abreast of new technology and financial offerings

Abiding by all gov’t regulations and legal proceedings

Declining sales in Europe

51% US Sales don’t have financing

Weak presence in emerging markets

Brand reputation

Worldwide auto market is highly competitive, volatile + Financial services industry

Decrease profit

Risk losing a major market for sales

Highly competitive financial services industry


Module 7 valuation using residual enterprise income

Used Bloomberg’s WACC


Module 7 valuation using residual enterprise income

Residual Enterprise Income Model


Module 7 valuation using residual enterprise income

Discounted Cash Flow Model


Module 7 valuation using residual enterprise income

Enterprise Value Comparison

  • My calculated Enterprise Value is similar to Yahoo! Finance’s EV.

    • $342,373 billion vs $349,460 billion


Module 7 valuation using residual enterprise income

Questions?


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