Financial analysis of Toyota, Honda and Nissan: a comparison approach - Essay Example

This paper includes the financial comparison of Toyota, Honda and Nissan. Toyota is considered to be the main firm and is compared to Honda and Nissan through the financial information. This paper consists of three main sections. Firs one deals with the industrial overwiew of the firm. PESTLE, Porter’s Five Forces, and SWOT are strategic tools used in carrying out the firm and industry analysis. The second part talks about financial analysis of various ratios regarding the firm. It also includes the valuation of the firm according to the contemporary business environment.

Section three contains conclusions and remarks about the major things identified during the analysis and provides recommendations to would-be investors. Section 1 is named Current State of the firm and includes such positions as: Target Firm, Basis of making comparisons, Vulnerability of the firms and industry to Macro-environmental factors, PESTLE Analysis of Automotive Industry, SWOT Analysis of Toyota, Financial Analysis of Toyota, Nissan, and Honda. Section 2 is named Analysis. It includes such positions: Multiples for Evaluation, Ratios, P/E ratio, PEG Ratio, Sales Growth, EPS (Diluted) Growth, P/E Ratio for the Five year Period, Price to Operating Profit Ratio, Shares, Potential Differences amongst the three Companies, Risk Efficiency, Managerial Efficiency, Comparing and Valuing Toyota.

Section 3 is named Conclusion. Paper includes 1 Work Cited. . Moreover, there can be a comparison in the corporate governance as well as corporate social and moral responsibilities that the firms are engaged in whilst attracting customers. Marketing mix (product, price, promotion, and place) could also form an important basis of carrying out comparison amongst the three firms. Vulnerability of the firms and industry to Macro-environmental factors Like many other industries, the automotive industry is highly affected by the macro-environmental factors that include Political, Economical, Socio-cultural, Technological, Legal, and Environmental (PESTLE) (Mcmillian, et al 67).

Therefore, Toyota, Nissan, and Honda as firms within the automotive industry are vulnerable to such factors. The following provides an overview of how the there firms and the entire automotive industry is vulnerable to macro-environmental factors. PESTLE Analysis of Automotive Industry Political: Political institutions affect operations of automotive industry and its firms. For instance, there are economies where political institutions are against consumptions of some model of cars thus affecting corresponding firms.

US market is currently experiencing political campaigns. Such political scenarios usually create fear amongst investors thus affecting exchange rates of various economies. Japan’s currency is currently appreciating as compared to American currency hence making cars from Toyota, Nissan, and Honda. This has affected the revenue and profitability of these firms as far as American automotive market is concerned. As a result, Toyota, Nissan, and Honda are adversely affected by unfavorable political environments resulting from campaigns in preparations for elections.

Economical: Excess capacity in the production, economies of