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192ant part of wise corporate stewardship and management is trying to find a good capital structure from shareholders return on risk and reward Equity Equity is representing a shareholders ownership of a company The sum of common stock capital surplus retained earnings and other components of equity and minus treasury stock is the total equity which had been invested in a company Equity means giving one party benefits as it is given to another However equity is crucial to ensure that the extent and costs of funds goods and services are equitably distributed among recipients In accounting ownership interest or claim of a holder of common stock and some types of preferred stock of a company According to an annual report of Honda Motor Co Ltd in the year ended March of 2017 the total equity of Honda Motor Co Ltd in 2016 and 2017 show as the following Common share issued by the Company is classified as equity and the proceeds from the issuance of common share are included in common stock and capital surplus
The sum of the loans medium term notes corporate bonds and asset backed securities and minus the reclassification to current liabilities as a current portion is the total long term debt According to the annual report of Honda Motor Co Ltd in year ended March of 2017 the total long term debt of Honda Motor Co Ltd in 2016 and 2017 show as the following Honda Motor Co Ltd s short and long term debt securities are rated by credit rating agencies such as Moody's Investors Service Inc Standard Poor's Rating Services and Rating and Investment Information Inc The following table shows the ratings of Honda s unsecured debt securities by Moody's Standard Poor's and Rating and Investment Information as of March 31 2017 The above ratings are based on information provided by Honda Motor Co Ltd and other information deemed credible by the rating agencies They are also based on the agencies assessment of credit risk associated with designated securities issued by Honda Motor Co Ltd Each rating agency may use different standards for calculating Honda Motor Co Ltd s credit rating and also makes its own assessment Ratings can be revised or nullified by agencies at any time These ratings are not meant to serve as a recommendation for trading in or holding Honda s unsecured debt securities Currency Used Honda Motor Co Ltd has manufacturing operations throughout the world including Japan and exports products and components to different regions such as North America Europe and Asia Honda Motor Co Ltd have rapidly developed and expanded overseas bases and currently possess 57 bases in 21 countries Honda Motor Co Ltd purchases materials and components and sells its products and components in foreign currencies Therefore currency fluctuations could affect Honda Motor Co Ltd s pricing of materials purchased and products sold Accordingly currency fluctuations have an effect on Honda s results and financial condition as well as Honda Motor Co Ltd s competitiveness which will overtime affect its results The consolidated financial statements are presented in Japanese yen which is the functional currency of the Company
All financial information presented in Japanese yen has been rounded to the nearest million Japanese yen except when otherwise indicated Foreign currency transactions are translated into the respective functional currencies at the exchange rates prevailing when such transactions occur Honda Motor Co Ltd has entered into foreign exchange contract to manage currency rate exposures This contract includes foreign currency forward contracts currency option contracts currency swap agreements and interest rate swap agreements All foreign currency receivables and payables are translated into the respective functional currencies at the applicable exchange rates at the end of the reporting period Gains or losses on exchange differences arising on settlement of foreign currency receivables and payables or on their translations at the end of the reporting date are recognized in profit or loss and they are included in finance income and finance costs other net in the consolidated statements of income
