TM Current Ratio Analysis

The current ratio of 1.17x measures Toyota's ability to pay short-term obligations with short-term assets, meaning it holds $1.17 in current assets for every $1 of current liabilities.

This sits below the sector median of 1.25x, placing the company at the 44th percentile among peers, so liquidity is slightly tighter than the typical competitor. The year-over-year change is not available, but the quarter-over-quarter change shows a 7.9% decline from 1.27x to 1.17x, indicating recent pressure on working capital. While the level is above the 1.0x threshold that signals potential trouble, the downward quarterly move warrants attention for liquidity risk. The combination of a sub-median ratio and a recent drop suggests modest short-term vulnerability, though not an immediate crisis. This metric does not contradict the overall NEUTRAL verdict; it aligns with a balanced view of adequate but not exceptional financial flexibility.

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