1. 1
NAME: LEE ERN HUI (0319703)
: MOK PO YI (0318207)
: LOH WEI LING (0319225)
COURSE NAME: FOUNDATION IN NATURAL AND BUILT
ENVIRONMENT
SUBJECT CODE: ACC30205
ASSIGNMENT: FINANCIAL RATIO ANALYSIS
COMPANY NAME:YAMAHA CORPORATION
LECTURER: MR. CHANG JAU HO
2. 2
TABLE OF CONTENT:
1. BACKGROUND OG OF YAMAHA CORPORATION
2. RECENT DEVELOPMENT
3. PROFITABILITY RATIO
4. STABILITY RATIO
5. PRICE EARNING RATIO
6. INVESTMENT RECOMMENDATON
7. APPENDIX
8. REFERENCES
3. 3
HISTORY
In 1897, Nippon Gakki Co., Ltd. Which is the current Yamaha Corporation is
established with capital of 100,000 yen. Later on 1949, Yamaha Corporation list its
shares on Tokyo Stock Exchange.1955, Yamaha Motor Co.Ltd was founded by
Genihi Kawakami and he was also the first president of Yamaha. Nippon Gakki
Hamana Factory was the first factory established and was located in Hamakita-cho.
There was also the first place where they produce their first product which was the
125cc Yamaha motorcycle “YA-1”. Later in year 1958, Yamaha "YA-2" becomes
first motorcycle to win Japan's "Good Design Award". In the same year Yamaha
also establishes their first overseas subsidiary in Mexico. In year 1966, Yamaha
Music Foundation was established and the company also expands into Europe with
the founding of Yamaha Europa GmbH, in West Germany. 1968, Yamaha issue
shares at market price for the first time in Japan. Nippon Gakki Co., Ltd was
changed to Yamaha Corporation to mark its 100th years in business. A music
entertainment business holding company was then created on 2007. Later on 2008,
Yamaha renew its Yamaha Ginza Building, including concert hall, music studio
and many more. They also manufacture Japanese boats to assists the Great East
Japan Earthquake in 2011. In 2012, Yamaha established ASEAN Integrated
Development Center to promote globalization of manufacturing, engineering, and
also marketing functions.Company founder Genichi Kawakami was rewarded as
Japan Automotive Hall of Fame in the same year. Yamaha Corporation has
recently been named Thomson Reuters 2014 Top 100 Global Innovator.
Yamaha was named based on the high appraisal of its intellectual property
activities in Japan and overseas. This is the second time for Yamaha to be selected,
after the first time in 2011.
4. 4
RECENT DEVELOPMENT
On 21th November 2014,Yamaha Corporation's SILENT Brass™ won a
Design for Asia Awards. It was hosted by the Hong Kong Design
Centre.Yamaha Corporation has become a official sponsor of a factory
racing team which is Movistar Yamaha MotoGP that compete in
Yamaha world motorcycle racing championship.
At the 2014 Frankfurt Messe, new products under the new slogan
“Passion and Performance”. Their purpose of creating this is to ensure
they can meet the needs and desire of their customers.
Furthermore, Yamaha Corporation recently been awarded second time
as Thomson Reuters 2014 Top 100 Global Innovator. As they have high
appraisal from its intellectual property activities in overseas and Japan.
5. 5
Profitability
Profitability Ratios 2012 2013 Interpretation
Return on Equity ( ROE )
=
= -13.4% = 2.0%
During the period of 2012
to 2013, ROE has increase
from -13.4% to 2.0%. This
means that Yamaha is
getting more return from
the capital than last year
Net Profit Margin Ratio
( NPM )
= -8.2% =1.1%
During the period of 2012
to 2013, NPM has
increased from -8.2% to
1.1%. This means that
Yamaha is getting better at
controlling their expenses
Gross Profit Margin Ratio
( GPM )
= 35.0% =35.1%
During the period of 2012
to 2013, GPM has
increases from 35.0% to
35.1%. This means that
Yamaha is getting better at
controlling their cost of
good sold (COGS)
Selling Expenses Ratio
( SER )
= 16.4% =16.3%
During the period of 2012
to 2013, SER has
decreased from 16.4% to
16.3%. This means that
Yamaha is getting better at
controlling their selling
expenses.
General Expenses Ratio
( GER )
= 16.4% =16.3%
During the period of 2012
to 2013, SER has
decreased from 16.4% to
16.3%. This means that
Yamaha is getting better at
controlling their genral
expenses.
Financial Expenses Ratio
( FER )
=0.3% =0.4%
During the period of 2012
to 2013, FER has increased
from 0.3% to 0.4%. This
means that Yamaha is
getting worse at
controlling their financial
expenses
6. 6
Stability
The following table shows the calculations and interpretations from the yaer of 2012 to 2013 ( Yens in
millions )
Financial Stability Ratios 2012 2013 Interpretations
Working Capital Ratio
( WCR )
= 2.59:1 = 2.77 : 1
During the 2012-2013 period,
the WCR has increased from
2.59:1 to 2.77:1. This means
that the business ability to pay
current liabilities with current
assets is getting better. In
addition, it does satisfy the
minimum requirement of 2:1
Total Debt Ratio ( TDR )
=43.6% =41.2%
During the 2012-2013 period,
the TDR has decreased from
43.6% to 41.2%. This means
that the business total debt has
reduced. In addition, it is still
exceed the maximum limit by
50% .
Inventory Turnover Ratio
( ITR )
365 =
= 117.7days
=
= 121.7days
During the 2012-2013 period,
the ITR has increased from
117.7days to 121.7days. This
means that the business is
selling their goods at a slower
rate.
Debtor Turnover Ratio
( DTR)
=368.7days =331.8days
During the 2012-2013 period,
the DTR has decreased from
368.7days to 331.8days. This
means that the business is
getting faster in collecting
debts.
Interest Coveragee Ratio
( ICR )
= ( - ) =16.9times
During the year of 2012 there
was a net loss. ICR cannot be
calculated.
7. 7
P/E Ratio
=16.0
With a 16.0 of P/E ratio, this means that investor of Mc Donalds has to wait about 16 years to recoup his
or her investment
8. 8
INVESMENT RECOMMENDATION
From the profitability ratio, there was a increase in the return on equity
(ROE) in 2012 compared to 2013. This is a advantage for the company.
For net profit margin (NPM), it has increased shows that Yamaha
Corporation is getting better at controlling their expenses. Furthermore,
for the gross profit margin ratio (GPM), the ability of the company to
control their cost of goods solids is also getting better. Based on the
selling expenses ratio (SER), it shows that Mc Donald’s is improving at
controlling their selling expenses which is also a good thing. Moreover,
the company is also getting better at controlling their general expenses
can be seen where there is a fall in 2013 compared to 2012.
Besides, for the financial stability ratio, the working capital ratio (WCR)
has increased from 2.59:1 in 2012 to 2.77:1 in 2013. This is an
improvement of the company to pay their current liabilities with current
assets in a shorter time as it does not satisfy the minimum requirement
of 2:1. The decrease in the total debt ratio (TDR) shows that the
business’ debt has reduced compared to the year before which is a good
thing. For inventory turnover (ITR), during the 2012-2013 period,
the ITR has increased from 117.7days to 121.7days. This
stats that the business is selling their goods at a slower
rate. The debtor turnover ratio (DTR) of Yamaha Corporation has
decreased from 368.7days to 331.8days. This means that the
business is getting slower in collecting debts, it is a
promising thing to see.During the year of 2012 there was a net
loss. ICR cannot be calculated.
