CHAPTER 15
SUMMARY
Toyota, the world's largest automaker, sank into the red for the October-December quarter, heading for its first annual net loss since 1950 because of the plunging global sales and the strong yen, which reduces the value of overseas earnings, adding salt to the wound.
Until the U.S. financial crisis erupted last year, Toyota had been on a roll with its fuel-efficient models, boasting rising profits for seven straight years.
"the downturn came extremely suddenly," said Yasuaki Iwamoto, analyst with Okasan Securities Co. in Tokyo, "the world's auto demand just changed in a flash."
Just a few hours before the earnings were released, Moody's Investors Service lowered its top credit rating of "Aaa" on Toyota by one notch to "Aa1," citing fears about its profitability.
A turnaround promised by Kinoshita, Toyota executive vice-president assured investors that Toyota will get back on its feet through cost cuts and new products. He said Toyota continues to be committed to developing gas-electric hybrids as a pillar of its growth strategy.
CONNECTION
Chapter 15 talks about how people would analyze a company's financial statements in order to make decisions within and outside the company, and how they will affect the insiders and outsiders in relation to the values and information presented on financial statements. As mentioned from the article, it has been told that investors have lowered its top credit - "Aaa" on Toyota to "Aa1", something that doesn't necessarily sound so great anymore. This indication shows that investor's confidence in Toyota motor corporation have decreased; Probably an outcome resulted from the recent values and percentages stated on the financial statements of Toyota. While this unfortunate event have happened to the all mighty Toyota, the insiders, also known as the managers, and other executive management members of the company have made promises and decisions as to the commitment to continue offering excellent quality and high performance vehicles for the upcoming eco-friendly products.
REFLECTION
From newspapers to radio broadcasts, televisions, and even on the worldwide internet, news about numerous businessses and companies closing down are no longer any big surprises to the people living in the current state of an unknown period of financial downturn. Globally, it is obvious that everything is slowing down, but natioanlly, everyone (governments, especially) is trying their best to boost their economy back up and in turn to drive the global economy back to it original state, more or less, every bit of efforts counts. We can see this phenonmenon in the article above, where the all mighty Toyota Motor Corp. is currently expericing its first ever loss in decades, and yet, they are not beaten down by the downturn scare and are trying their best in everyway to maintain its status in the industry and concentrating on their research development int he effort to bring back up its sales and what not. They want to ensure their investors that they will not give up and is down for any obstacles that comes to them.
