Assesment 1 – BSBFIM501A Toyota

BSBFIM501 Assessment 1 Manage Budgets and Financial Plans

Provide an overview of the organisation and your business unit

Toyota Motor Corporation is a Japanese automotive manufacturer headquartered in Toyota, Aichi, Japan. In March 2014 the multinational corporation consisted of 338,875 employees worldwide and, as of November 2014, is the eleventh-largest company in the world by revenue. Toyota was the largest automobile manufacturer in 2012 (by production) ahead of the Volkswagen Group and General Motors. In July of that year, the company reported the production of its 200-millionth vehicle.

The company was founded by Kiichiro Toyoda in 1937 as a spinoff from his father’s company Toyota Industries to create automobiles. Three years earlier, in 1934, while still a department of Toyota Industries, it created its first product, the Type A engine, and, in 1936, its first passenger car, the Toyota AA. Toyota Motor Corporation produces vehicles under 5 brands, including the Toyota brand, Hino, Lexus, Ranz, and Scion. It also holds a 51.2% stake in Daihatsu, a 16.66% stake in Fuji Heavy Industries, a 5.9% stake in Isuzu, a 3.58% stake in the Yamaha Motor Company, and a 0.27% stake in Tesla, as well as joint-ventures with two in China (GAC Toyota and Sichuan FAW Toyota Motor), one in India (Toyota Kirloskar), one in the Czech Republic (TPCA), along with several “nonautomotive” companies. TMC is part of the Toyota Group, one of the largest conglomerates in the world.

On May 8, 2013, Toyota Motor Corporation announced its financial results for the fiscal year ended March 31, 2013. Net revenues totaled ¥22.0 trillion (+18.7%). Operating income was ¥1.32 trillion (+371%), net income ¥962.1 billion (+239%).

Identify the internal strategic goals for this organisation and the external stakeholders, and discuss their influence on the financial decisions in to your organisation

Toyota’s Vision Statement

Toyota Motor Corporation’s vision statement indicates the company’s long-term strategic direction in the automobile industry. This vision statement reads, “Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people. Through our commitment to quality, constant innovation and respect for the planet, we aim to exceed expectations and be rewarded with a smile. We will meet our challenging goals by engaging the talent and passion of people, who believe there is always a better way.”

In this vision statement, Toyota includes major areas of its business. The vision statement states that the company aims to achieve leadership in the global market. The vision statement also shows that Toyota moves forward based on quality, innovation and environmental conservation. Thus, Toyota includes corporate social responsibility in its vision statement. In addition, the company emphasizes human resource development, as shown in the “talent and passion of people” component of the vision statement. Therefore, Toyota’s vision statement is holistic because it encompasses strategic goals for business leadership, product quality, human resources, and corporate social responsibility. These points of the vision statement have direct correlation with the points in Toyota’s mission statement.

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rporate social responsibility in its vision statement. In addition, the company emphasizes human resource development, as shown in the “talent and passion of people” component of the vision statement. Therefore, Toyota’s vision statement is holistic because it encompasses strategic goals for business leadership, product quality, human resources, and corporate social responsibility. These points of the vision statement have direct correlation with the points in Toyota’s mission statement.

Toyota’s Mission Statement

Toyota Motor Corporation uses various mission statements for its businesses in different markets. However, with regard to the business of automobile manufacturing and sales, the company’s mission statement pertains to its strategic actions in technology. Thus, Toyota’s mission statement is as follows: “Create vehicles that are popular with consumers.” In expanded form, Toyota’s mission statement includes the following strategic actions:

Provide world-class safety to protect the lives of customers.

Provide optimization of energy/infrastructure to local communities.

Put high priority on safety and promote product development with the ultimate goal of “completely eliminating traffic casualties”.

Deliver cars that stimulate and even inspire, and earn smiles from our customers.

Address employees’ education under “Genchi-genbutsu” philosophy, which is to go to the source to find the facts to make correct decisions, build consensus and achieve goals at our best speed.

Through true mutual trust with partners, contribute to the development of new technology and improved expertise.

Contribute to economic development of local communities with R&D operations functioning effectively in each region.

Discuss the different types of budgets your organisation is required to prepare and provide an explanation on how each budget is developed

 – an estimate of future sales, often broken down into both units and currency. It is used to create company sales goals.

 – an estimate of the number of units that must be manufactured to meet the sales goals. The production budget also estimates the various costs involved with manufacturing those units, including labor and material. Created by product oriented companies.

 – used to determine whether an organization’s long-term investments such as new machinery, replacement machinery, new plants, new products, and research development projects are worth pursuing.

Cash flow/cash budget – a prediction of future cash receipts and expenditures for a particular time period. It usually covers a period in the short-term future. The cash flow budget helps the business determine when income will be sufficient to cover expenses and when the company will need to seek outside financing.

Marketing budget – an estimate of the funds needed for promotion, advertising, and public relations in order to market the product or service.

Project budget – a prediction of the costs associated with a particular company project. These costs include…

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