Accounting and Financial Management Project Report: Toyota Analysis

This project report provides a comprehensive analysis of Toyota Motor Corporation's accounting and financial management practices. The report begins with an executive summary and delves into the environmental and social impacts of Toyota's operations, examining both positive and negative factors. It highlights four key GRI (Global Reporting Initiative) disclosures relevant to Toyota and compares its performance with competitor BMW, focusing on sustainability and carbon emissions. The report also discusses the benefits of GRI compliance for shareholders. Furthermore, it includes a cost analysis for launching a new "smart" vehicle, applying the break-even analysis concept. Finally, it presents a balanced scorecard for the smart car production, outlining financial and customer objectives. The report concludes with an overall assessment of Toyota's performance and its strategic approach in the industry.

Running Head: Accounting and Financial Management
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Project Report: Accounting and Financial Management

Accounting and Financial Management
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Executive Summary
In the report, the overall evaluation has been done on the legal and environment
factors of the business. It identifies the performance of business in the industry. It contains
the list of positive and negative factors on the operations of the business. The comparison has
also been done on the performance of the company along with the competitor, BMW. The
report mainly focuses on the GRI to identify the standards and disclosure policy of the
business.

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Contents
Part A................................................................................................................................4
Introduction...................................................................................................................4
Environment and social impacts on Toyota’s operations.............................................4
Positive impact..........................................................................................................4
Negative impact........................................................................................................5
Four key GRI disclosure...............................................................................................6
Comparison of BMW and Toyota on depth and quality...............................................7
Benefits to the shareholders due to the GRI compliances............................................8
Conclusion....................................................................................................................9
Part B................................................................................................................................9
Part C..............................................................................................................................11
References.......................................................................................................................14

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Part A:
Introduction:
Toyota Motor Corporation is a car and vehicles manufacturing company which is
mainly based in the Japan market. Company has been incorporated in the year of 1937.
Headquarter of the company is situated in Toyota, Aichi. The company has also diversified
its market in various other industries such as financial industry in order to improve the
revenue of the business. The main segment of the business contains financial services and
automotive products. The company has entered at international market and currently it is
covering almost 30 countries worldwide (Reuters, 2018). The company owns around 50
overseas companies at the international market to produce the motor cars and vehicles.
The company has been awarded as largest automobile manufacturing company at
worldwide. The company is at second number in order to generate the revenue. The company
has employed around 3,64,445 employees. In the report, the overall evaluation has been done
on the legal and environment factors of the business. It contains the list of positive and
negative factors on the operations of the business. The comparison has also been done on the
performance of the company along with the competitor, BMW.
Environment and social impacts on Toyota’s operations:
There is huge responsibility in front of the company because of the fact that it is the
leading company in the automobile industry and it requires preserving the environment and
society. Though, the manufacturing process of vehicle and motor parts affect the
environment and society at great level. The mission and vision of the business describe that
main focus of the company is on two things: one is maintain the quality of the products and
services for the customers and other one is to maintain the environment (Chowdhury &
Crossley, 2009).
However, the manufacturing process always leads to the production companies
towards huge affect on the society and environment factors. It always has few positive and
negative factors in the business. The Toyota global (2018) brief sustainability report of
Toyota in which all the facts have been disclosed and the GRI disclosure has also are done by
the company in order to maintain the performance of the business.
Positive impact:

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The positive impact on the manufacturing activities of Toyota upon the society and
the environment are as follows:
 The company has shown the concern towards the society through promoting the new
events for the betterment of the humans and improve the living standards of the
people.
 The company is maintaining great cleaning around the factories and business in order
to manage the environment of the surroundings (cohen et al, 2012).
 The company has taken an initiative to preserve the forest. Various projects have been
promoted by the business to meet the goal such as Toyota Shirakawa-Go-Eco-
Institute, Toyota Mie Miyagawa Forest Project and Toyota Environmental Activities
Grant Program.
 Toyota also focuses on the culture and promotes the music, traditions and local things.
The company has also invested in the social welfare programs.
 The sustainability report leads to the study that company has conducted a program for
the dealers to improve the productivity and reduce the threat level of the business.
Negative impact:
Along with the positive impact, few negative points have also been seen on the
environment and society because of manufacturing process of Toyota:
 The production process of motor vehicles requires the consumptions of fuel and
electricity which affect the overall safety of the environment and human assets of the
business. Such huge uses of the natural items lead to the environment towards a bad
situation.
 The increment of the pollution in the air also affect on the environment and the
society of the business. It leads breathing issues, huge demand of diesel, global
warming etc in the society (Pfaff, 2012).
 The huge number of cars on the road also affects the environment of the business
because of huge prices and the increment in the diesel and fuel.
The above discussed points are few negative and positive impacts on the business and
operations which are carried out by the Toyota.

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Four key GRI disclosure:
GRI (global reporting initiative) is an independent standards organization which
operates and regulates at the international level. The main objective of this organization is to
assist the organizations and government to understand the impact because of their activities
and operations on the climate change, corruptions, human rights etc.
In case of Toyota motors, the four key disclosures of GRI have been given which are
relevant to the company and the shareholders of the company. The list is as follows:
Products and services:
The Toyota has brief all the activities, process and products on the website to make it
easier for the shareholders of the company to identify about the performance of the company
and make decision about the position. The Toyota has explained the manufacturing of
engines, motor vehicles, electric and non electric cars etc on the website along with the other
operations in different industries (Taylor et al, 2008).
Energy:
The energy efficiency is one of the major tasks amongst the car manufacturing
companies. Currently the Toyota is launching various products in the market which are
energy efficient. The process and the brand awareness of the company are higher which
attracts the various customers and shareholders towards the company. It attars huge
shareholders and improves the overall economy level of the business. The different segment
product has helped the business to grab more market share.
Effluents and waste:
The company has focused on commencing and running the activities of the business
through keeping in the mind about the various environment related activities. It has been
really indicated by the company in the annual report about the GRI policies and the
disclosure along with the standards (Shiga & Nakatsuka, 2009). The new product launch of
zero emission vehicles and fast filling energy stations would improve the performance of the
company among the shareholders.
Customer health and safety:

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Customer health and safety is one of the important topics in front of a business
especially in the automobile industry. Toyota has followed and launched various new policies
to promote the safety of the products and improve the health management of the business.
The process and the customer health and safety attars huge shareholders and improves the
overall economy level of the business.
Comparison of BMW and Toyota on depth and quality:
The comparison study has been done further on the Toyota motors and BMW motors
to identify the depth and quality of each company. The table is as follows:
Particulars Toyota Corporations BMW Group
Promote Sustainable
Societies
AA GRADE AA GRADE
Sustainable Value
Nature
Positive Closet to Positive
Carbon Disclosure
Project
A GRADE A GRADE
CO2 Emissions Toyota Prius’s efficiency level
has been increased to 56 MPG
as well as the CO2-e emissions
per mile have also been raised
to 226 grams (Global
reporting, 2018).
However, in BMW, the CO2
emissions have been reduced
by 141 grams per kilometre.
Achievements  Calculation about the
Pollinator gardens.
 Disclosure of various new
 “Fleet Manufacturer of
the year” award has been

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projects.
 92% of waste is recycled by
the business.
got by BMW
 The emission of CO2 falls
constantly.
 The company is focusing
on the recycle to maintain
the waste.
Strategy  Company has adopted
KAIZEN costing system
 The company has
developed THUMS Model.
 Eco Electrification
 Renewable energy
resources have been used
by the company.
 The diversity level has
been improved.
 A healthy working
environment has been
made for the workers.
Initiatives  Rainforest restoration
project has been
implemented (Toyota
global, 2018).
 “Toyota Traffic Safety”
Campaign has been done.
 Electronic Cars have been
launched
 Cell Vehicles
 HIV and aids programs
has been implemented
and conducted at the
workplace.
 Fast energy stations have
been launched.
 Inzell Initiative

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Benefits to the shareholders due to the GRI compliances:
Because of the GRI standards and the disclosure policies, the Toyota has disclosed all
the relevant factors and the activities of the business in the annual report. The disclosure of
all the details has offered a base to the shareholders to analyze the performance and position
of the business through measuring the significant information and the relevance of the
business in the industry. The above discussed GR4 factors have been followed by the
business at great extent which has spread the performance and information about the
company among the stockholders of the business (Pohl, 2010). The disclosure of such
information and the data about the company has created a sense of responsibility among the
internal shareholders of the business.
The disclosure has provided a sort of assurance and the customers, suppliers, investors
and society of the business has got information about the company. The other companies on
the industry are also complied the GRI standards and which influence the Toyota to follow
the same (Chen, Duan, Cai, Liu & Hu, 2011). The changes lead to the business towards better
position.
Conclusion:
To conclude, the Toyota motors have managed the overall performance in the
industry and it is quite attractive among the stakeholders of the business. The company
focuses on all the relevant factors and make better strategies to reduce the threat level. The
company has achieved great heights in the industry and the current market share of the
business is also impressive.
Part B:
Toyota motors is planning to launch a new “smart” vehicle in the market, the
manufacturing of the cars involves huge fixed and variable cost. The below table brief major
cost involvement in the prediction process of Smart vehicles:
Cost Amount
(in $
million)
Raw Materials (steel, aluminium,
petroleum products etc)
$15

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Labour overhead $10
Accessories and Spare parts $8
Gasoline $8
Engine $9
Other variable cost $5
Fixed cost $40
According to the above table, the raw material, accessories, gasoline and engine are
the variable cost whereas the labour overhead and other variable cost and 90% variable and
10% fixed. Lastly, $ 40 million is the fixed cost of the production.
The break even analysis concept makes it clear in the business that whether the
project would be able to cover all the expense or not, and how much changes into the fixed
cost and variable cost would lead to the business to meet the objectives. It makes it
significant for a company to make relevant and better decision about the project and the
activities of the business. Thus a business should apply this technique in the business.
Balanced scorecard of the business is as follows:
Balanced Score Card: Smart Car Production
Financial
Objectives Measures Initiatives
Improve the profits
and sales of the
business
Lead: identify the changes into
the sales (in %)
Apply various measurements
to identify the threats which
reduce the sales of the
company.
Lag: Growth perspective
Customer
Objective Measures Initiatives
Improve the brand
image and quality of
products
Lead: identify the demand and
choices of customers.
the customers must be
satisfied and ask for their
feedback about the product
of the company

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Lag: Evaluate the activities of
the competitors
Internal Business Process
Objective Measures Initiatives
Improvement in the
production process
and internal
operations
Lead: the changes into the
production process.
Business is required to
measure the quality level of
the business and make
decisions for betterment of
the business.
Lag: evaluate and manage the
internal operations
Learning and Growth
Objective Measures Initiatives
New techniques to
improve the overall
performance such as
Six sigma
Lead: Evaluate and place the
right people at right position
Evaluate and identify the
periodic performance of the
business.
Lag: Evaluate the organization’s
performance.
The features of balanced scorecard are as follows:
 The scorecard identifies and takes the concern on the various measures.
 It would help the company to make the relevant changes in order to improve the
performance of the business.
 Lead and leg measures make it easier for the business to meet the goals.
Such measures have been chosen by the business to improve the sales, profitability and
market share of the business.
Part C:

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Break even analysis of the business is as follows:
Calculation of Break Even Point
BEP (in units) Fixed cost / Contribution
Blue Tooth Head Set Demisting
mirrors
Self Cleaning
Mats
Sales 87.5 47 58
Materials 28.00 15.5 13.00
Labour 16.00 12.00 10.00
Overhead 0.70 0.60 0.50
Total variable cost 44.70 28.10 23.50
Contribution 42.80 18.90 34.50
Equipment
depreciation
$
225,000.00
Rent $
80,000.00
Marketing $
120,000.00
Other $
20,000.00
Total Fixed cost $
445,000.00
Sales mix Cost
40%
$
17.31
28%
$
5.31
31%
$
10.85
Weighted Average CM per
Unit 33.48
Composite BEP
Fixed cost 445,000.00
Weighted Average CM per Unit 33.48
BEP units 13,293
Sales mix 40% 28% 31%