Toyota vs Honda – Other Financial Analysis
4. Other financial and non-financial analysis This section objective is to compare significant financial and non-financial information and identify risks reported in Toyota’s and Honda’s 2010 Annual Report, Notes to the Financial Statements, Company Official Websites, Bloomberg and Thompson Reuters; which are not reflected in our financial ratio analysis and might have a significant impact in our investment decision making process. Dividends Payments and Dividend Yield Cash dividends per share| | | | Year| 31/03/2008| 31/03/2009| 31/03/2010|
Company| | | | Toyota| | ? 140. 00 | ? 100. 00 | ? 45. 00 | Honda| | ? 86. 00 | ? 63. 00 | ? 38. 00 | | | | | | | | | | | Estimated dividend yield* %| | | | Year| 31/03/2008| 31/03/2009| 31/03/2010| Toyota| | 2. 82%| 3. 18%| 1. 20%| Honda| | 3. 02%| 2. 74%| 1. 15%| | | | | | * A financial ratio that shows how much a company pays out in dividends each year relative to its share price. The dividend yield is the return on investment for a stock. | Toyota has been paying higher dividends per share over the three financial years ended at March, 31st.
In addition, the dividend yield calculation shows that Toyota has been providing a higher ROI for its shareholders stocks investment in 2009 and 2010. Contractual Obligations Contractual Obligations* | | | | | | | | | | | | | Payments due by period (Yen – Million)| | | Less than 1 year| 1 to 3 years| 3 to 5 years| 5 years and after| Total| Toyota| ? 5,544,923 | ? 4,271,809 | ? 1,477,862 | ? 1,345,294 | ? 12,639,888 | Honda| ? 2,086,970 | ? 1,680,539 | ? 781,779 | ? 135,967 | ? 4,685,255 | Ratio Toyota over Honda| 2. 66 | 2. 54 | 1. 9 | 9. 89 | 2. 70 | | | | | | | * Includes short and long term borrowings, capital and operating leases, interest payments and contributed defined benefit pension plans. | The above mentioned analysis is meant to understand the future obligations Toyota and Honda have in regards to their future earnings. For Example, for every ? 1 million earned in the 2011 financial year by Toyota, the company is committed to pay its contractual obligations of ? 266,000, while, for the same ? 1 million Honda 2011 financial year earnings, the company is only committed to pay ? 100,000.
This means that Honda would have more earnings to spare for future business developments and dividend payments. Net Revenue Geographic Segmentation Net Revenues Geographic Segmentation| | | | Yen in Millions | | Toyota| %| Honda| %| Japan| ? 7,314,813 | 39%| ? 1,577,318 | 18%| North America| ? 5,583,228 | 29%| ? 3,736,447 | 44%| Europe| ? 2,082,671 | 11%| ? 764,785 | 9%| Asia| ? 2,431,648 | 13%| ? 1,543,397 | 18%| Others| ? 1,538,613 | 8%| ? 957,227 | 11%| | ? 18,950,973 | 100%| ? 8,579,174 | 100%| The table above shows the concentration % of Toyota and Honda Net Revenue by geographical segmentation.
Toyota top net revenue segments contribution comes from Japan at 39%, followed by North America 29% and Asia 13%; while, Honda top net revenue segments comes from North America 44%, Asia and Japan are tied with 18%. Knowing that Japan was hit by a Tsunami in the first quarter of 2011; in our opinion, this natural catastrophic event will adversely affect Toyota net revenue in Japan for the upcoming financial year. This means that Honda overall, will probably have a more stable stream of revenue from the North America and Asia regions to support its operations.