Another sign of just how fast the wheels have come off the economy: Toyota (TM), which just two months ago called for a $1.6 billion annual loss in its year ending March 31, has just tripled that number to around $5 billion. It’s one thing to say that the quarterly loss will triple, but this is the annual loss tripling after only two more months of visibility.
But Toyota’s OK, right? Surely it can make it through the downturn unscathed? Maybe, though even mighty Toyota doesn’t have unlimited funds.
AutolineDetroit: In its most recent financial report, Toyota states that it has ¥1.8 trillion in cash, which is roughly $18.5 billion, or about the same level of cash Ford reported in its most recent financial statement.
More tellingly, Toyotas total current liabilities (short term) now match its total current assets. In the past, Toyota’s current assets always exceeded its current liabilities. When a company’s liabilities exceed its assets, it has to dip into its cash reserves to make up the difference-unless its operations are generating positive cash flow. But right now Toyota is not generating positive cash flow.
Good news though: Toyota still plans to produce Hybrids.