Toyota vs Tesla Liquidity and Profitability
Q – Please read the discussion below and prepare a Reply to this discussion post with comments that further and advance the discussion topic. Please provide the references you used. Ensure zero plagiarism. Word limit: 50 to 70 words please do not exceed the limit. Discussion Toyota Motor Corporation and Tesla, Inc Liquidity and Profitability Ratios here are several key financial ratios commonly used to measure a company’s financial position and assess its overall health. These ratios provide insights into various aspects of a company’s financial performance, liquidity, solvency, profitability, and efficiency first, i will be using Liquidity Ratios: Current Ratio: Current Assets / Current Liabilities the current ratio is also referred to as the working capital ratio. This ratio compares a company’s current assets to its current liabilities, testing whether it sustainably balances assets, financing, and liabilities. Typically, the current ratio is used as a general metric of financial health since it shows a company’s ability to pay off short-term debts. and I will be comparing Toyota Motor Corporation with Tesla, Inc. Liquidity and Profitability Ratios Beginning with: The current and historical current ratio for Toyota (TM) from 2010 to 2023. The Current ratio is a liquidity ratio that measures a company’s ability to pay short-term obligations. Toyota current ratio for the three months ending June 30, 2023 was 1.11. The current and historical current ratio for Tesla (TSLA) from 2010 to 2023. Current ratio can be defined as a liquidity ratio that measures a company’s ability to pay short-term obligations. Tesla’s current ratio for the three months ending June 30, 2023 was 1.59. In general, a higher liquidity ratio shows a company is more liquid and has better coverage of outstanding debts, so in This case, Tesla has a Competitive advantage. And secondly, I will be using Profitability Ratios: Return on Investment (ROI) and once again I will be comparing Toyota Motor Corporation with Tesla, Inc. ROI stands for Return on Investment. It is a financial metric used to evaluate the profitability or efficiency of an investment or business activity. ROI measures the return or gain on an investment relative to its cost. It is expressed as a percentage or a ratio. Current and historical return on investment (ROI) values for Toyota (TM) over the last 10 years has a 6.50% and Current and historical return on investment (ROI) values for Tesla (TSLA) over the last 10 years have a 26.26% in this case a a higher A positive ROI indicates that the investment or activity has generated a higher profit so in this comparison Tesla Has a higher profit.
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