Research on the Corporate Value of Toyota Based on Multiple Valuation Method

Abstract

Toyota corporation’s stock prices are determined by valuations, which are important in making a comparison between the company's financial status and stock price to its principal competitors' stock prices. The most common multiple valuation methods used by analysts include the Price-Earnings (P/E) ratio and the Enterprise Value to Adjusted EBITDA (EV/EBITDA) ratio. This paper uses these two compelling ratios to describe the stock prices of a corporation throughout the process of analyzing the financial ratios of a financial statement. The P/E ratio and EV/EBITDA, two key multiple valuation tools, as well as the financial data from Toyota Industries Group's primary competitors, are used to determine whether the stock prices of Toyota corporation over the past three years are overvalued, undervalued, or fair. The conclusive findings that can be drawn from the enterprise values of Toyota corporation are that they are undervalued, even though the stock prices are appropriate. Besides, through stock price valuation, investors can make judgments and choose to continue to hold or sell.