How Much Does Toyota Spend On Selling, General And Administrative Expenses?

by Trefis Team
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Toyota Motor Corporation (NYSE: TM) spent $26.8 billion on Selling, General and Administrative expenses in FY 2019 (ended March 2019) which was 9.8% of Total Revenues.  Trefis estimates the expense to continue to remain around 9.8% of Total Revenue in 2020 (ended March 2020). The Company’s total expenses have trended steadily higher from around $245.4 billion in 2017 to about $255.3 billion in 2019 (ended March 2019). As a percentage of revenues, expenses have remained roughly flat at about 92-93%. Below, we discuss Toyota Motors’ net margins and Total expenses along with its components.

View our interactive dashboard analysis on Toyota Motors Expenses: How Does Toyota Spend Its Money?

 

Toyota Motors’ Net Income Margins have been fluctuating between 2017 and 2019

  • Toyota Motors’ Net Income margin increased from 6.6% in 2017 to 8.5% in 2018 and fell back to 6.2% in 2019. Trefis expects the margin to be around 7.6% in 2020 (ended March 2020).

Toyota Motors’ Total Expenses Have Increased by 4% between 2017 and 2019

  • Toyota Motors’ total expenses have grown from $245.4 billion in 2017 to about $255.3 billion in 2019 which comes to 4% over the 2 years.
  • For 2020, we expect expect total expenses to stand at $262.2 billion, which comprises of:
    • Operating Expenses = $256.8 Bil
    • Income tax expense = $6.2 Bil
    • Non-operating (income)/expense = $2.1 Bil
    • Non-controlling Interest = $0.8 Bil
    • Loss / (Earnings) from Equity in companies = -$3.8 Bil

Below, we take a look at how the company’s key expense components have trended and the key reasons for the change.

  1. Operating Expenses: Operating Expenses have increased from $243.8 billion in 2017 to $250.1 billion in 2019, driven primarily by a $6.8 billion increase in Cost of Sales.

  • Cost of Sales have increased from $216.5 billion in 2017 to $223.3 billion in 2019 and is expected to be around $229 billion in 2020. As % of Revenues, Cost of Sales has decreased gradually from 82.4% to 82% over the same period.
  • Selling, General and administrative Expenses decreased from $27.3 billion in 2017 to about $26.8 billion in 2019 and is expected to be around $27.9 billion in 2020. As % of Revenue, Selling, General and administrative Expenses  have declined from 10.4% in 2017 to 9.8% in 2019.
  1. Non-Operating Expenses: Toyota Motors’ Non-Operating Expenses are quite nominal in relation to the Overall expenses. They have increased from -$1.9 billion in 2017 to $1.6 billion in 2019. Trefis estimates the expenses to be around $2.2 billion in 2020.
  2. Tax Expense: Toyota Motors’ Income Tax Expense has declined from $5.99 billion in 2017 to about $5.95 billion in 2019, Driven By U.S. Federal Income Tax Reforms, with the Effective Tax rate declining from 33.5% to 22.4%.
  3. Earnings from Equity in affiliated companies: Toyota Motors’ Earnings from Equity in affiliated companies have decreased from $3.4 billion in 2017 to $3.2 billion in 2019. Trefis estimates the income to be around $3.8 billion in 2020.

 

 

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