Analysis and Valuation of Toyota’s— Multiple Valuation Method of PE Ratio and EV EBITDA Ratio

Abstract

With the continuous development of the automobile industry, Toyota has become the world's largest multinational automobile manufacturer. By referring to Toyota's 2019-2022 financial report and comprehensive report, this paper analyzes the company's business strategy and investment strategy and makes a relevant financial analysis. This paper mainly uses two methods of value assessment. The first method is EBITDA/EV, which is also considered an enterprise value multiple valuation model. The second is the price-earnings ratio valuation, which can be used to determine whether a company is overvalued or undervalued in the market. Based on the above analysis, the author believes that Toyota is overvalued, but it is relatively safe for investors based on its excellent operating performance and its leading position in the industry. At the same time, the author also expounds on the influence of Toyota's overvaluation on future development and emphasizes Toyota's current competitive advantages and potential market threats. Furthermore, since Toyota has undergone great changes in recent years and there are few types of research on Toyota from 2021 to 2022, the research significance of this paper is to help readers better grasp the recent financial status, business strategy, and enterprise value of Toyota.