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Goodyear Tire & Rubber Co (NAS:GT)
Piotroski F-Score
5 (As of Today)

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Goodyear Tire & Rubber Co has an F-score of 5 indicating the company's financial situation is typical for a stable company.

GT' s 10-Year Piotroski F-Score Range
Min: 1   Max: 8
Current: 5

1
8

During the past 13 years, the highest Piotroski F-Score of Goodyear Tire & Rubber Co was 8. The lowest was 1. And the median was 5.


Definition

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 173 + 235 + -51 + 213 = $570 Mil.
Cash Flow from Operations was 164 + 1236 + -1543 + 409 = $266 Mil.
Revenue was 5002 + 4791 + 4469 + 4656 = $18,918 Mil.
Gross Profit was 1056 + 1101 + 951 + 1124 = $4,232 Mil.
Average Total Assets from the begining of this year (Jun13)
to the end of this year (Jun14) was
(17384 + 17672 + 17527 + 17092 + 16942) / 5 = $17,323 Mil.
Total Assets was $16,942 Mil.
Long-Term Debt was $6,677 Mil.
Total Current Assets was $8,038 Mil.
Total Current Liabilities was $5,025 Mil.
Net Income was 117 + 7 + 33 + 188 = $345 Mil.

Revenue was 5264 + 5045 + 4853 + 4894 = $20,056 Mil.
Gross Profit was 949 + 945 + 913 + 1048 = $3,855 Mil.
Average Total Assets from the begining of last year (Jun12)
to the end of last year (Jun13) was
(17601 + 17939 + 16973 + 17458 + 17384) / 5 = $17,471 Mil.
Total Assets was $17,384 Mil.
Long-Term Debt was $6,325 Mil.
Total Current Assets was $8,969 Mil.
Total Current Liabilities was $5,175 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Goodyear Tire & Rubber Co's current net income (ttm) was 570. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Goodyear Tire & Rubber Co's current cash flow from operations (ttm) was 266. ==> Positive ==> Score 1.

Q3. Change in Return on Assets

Compare this year’s return on assets (1) to last year’s return on assets.

Score 1 if it’s higher, 0 if it’s lower.

ROA (This Year)=Net Income (TTM)/Average Total Assets from Jun13 to Jun14
=570/17323.4
=0.03290347

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Jun12 to Jun13
=345/17471
=0.01974701

Goodyear Tire & Rubber Co's return on assets of this year was 0.03290347. Goodyear Tire & Rubber Co's return on assets of last year was 0.01974701. ==> This year is higher. ==> Score 1.

Q4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA =< ROA.

Goodyear Tire & Rubber Co's current net income (ttm) was 570. Goodyear Tire & Rubber Co's current cash flow from operations (ttm) was 266. ==> 266 =< 570 ==> CFROA =< ROA ==> Score 0.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Jun14)=Long-Term Debt/Total Assets
=6677/16942
=0.39410931

Gearing (Last Year: Jun13)=Long-Term Debt/Total Assets
=6325/17384
=0.36384031

Goodyear Tire & Rubber Co's gearing of this year was 0.39410931. Goodyear Tire & Rubber Co's gearing of last year was 0.36384031. ==> Last year is lower than this year ==> Score 0.

Q6. Change in Working Capital (Liquidity)

Compare this year’s current ratio (current assets divided by current liabilities) to last year’s current ratio.

Score 1 if this year'’s current ratio is higher, 0 if it’s lower

Current Ratio (This Year: Jun14)=Total Current Assets/Total Current Liabilities
=8038/5025
=1.59960199

Current Ratio (Last Year: Jun13)=Total Current Assets/Total Current Liabilities
=8969/5175
=1.7331401

Goodyear Tire & Rubber Co's current ratio of this year was 1.59960199. Goodyear Tire & Rubber Co's current ratio of last year was 1.7331401. ==> Last year's current ratio is higher ==> Score 0.

Q7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Goodyear Tire & Rubber Co's number of shares in issue this year was 281. Goodyear Tire & Rubber Co's number of shares in issue last year was 282. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

Efficiency

Q8. Change in Gross Margin

Compare this year’s gross margin (gross profit divided by sales) to last year’s.

Score 1 if this year’s gross margin is higher, 0 if it’s lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=4232/18918
=0.22370229

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=3855/20056
=0.19221181

Goodyear Tire & Rubber Co's gross margin of this year was 0.22370229. Goodyear Tire & Rubber Co's gross margin of last year was 0.19221181. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by average total assets throughout the year) to last year’s asset turnover ratio.

Score 1 if this year’s asset turnover ratio is higher, 0 if it’s lower

Asset Turnover (This Year)=Revenue (TTM)/Average Total Assets from Jun13 to Jun14
=18918/17323.4
=1.0920489

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Jun12 to Jun13
=20056/17471
=1.14795948

Goodyear Tire & Rubber Co's asset turnover of this year was 1.0920489. Goodyear Tire & Rubber Co's asset turnover of last year was 1.14795948. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+0+0+0+1+1+0
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Goodyear Tire & Rubber Co has an F-score of 5 indicating the company's financial situation is typical for a stable company.


Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Related Terms

Net Income, Cash Flow from Operations, Revenue, Gross Profit, Total Assets, Long-Term Debt, Total Current Assets, Total Current Liabilities, Altman Z-Score, Beneish M-Score


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Goodyear Tire & Rubber Co Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1101000111
Q2 1111011111
Q3 1101001101
Q4 1110011111
Q5 1001001100
Q6 0010010101
Q7 0010010010
Q8 1101001011
Q9 1011001100
F-score 7556046756

Goodyear Tire & Rubber Co Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 1110111111
Q4 1111111100
Q5 0000000000
Q6 1110000100
Q7 1011001011
Q8 0001111111
Q9 1000000000
F-score 7565556655
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