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

Good Sign:

Piotroski F-Score of 7 is 7, indicating very healthy situation.

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Goodyear Tire & Rubber Co has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

GT' s 10-Year Piotroski F-Score Range
Min: 1   Max: 8
Current: 7

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 (Jun15) TTM:Last Year (Jun14) TTM:
Net Income was 161 + 2129 + 224 + 192 = $2,706 Mil.
Cash Flow from Operations was 195 + 1279 + -262 + 536 = $1,748 Mil.
Revenue was 4657 + 4356 + 4024 + 4172 = $17,209 Mil.
Gross Profit was 1141 + 1016 + 958 + 1145 = $4,260 Mil.
Average Total Assets from the begining of this year (Jun14)
to the end of this year (Jun15) was
(16942 + 16656 + 18109 + 17336 + 17516) / 5 = $17311.8 Mil.
Total Assets at the begining of this year (Jun14) was $16,942 Mil.
Long-Term Debt was $5,746 Mil.
Total Current Assets was $7,695 Mil.
Total Current Liabilities was $4,741 Mil.
Net Income was 173 + 235 + -51 + 213 = $570 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 last year (Jun13)
to the end of last year (Jun14) was
(17384 + 17672 + 17527 + 17092 + 16942) / 5 = $17323.4 Mil.
Total Assets at the begining of last year (Jun13) was $17,384 Mil.
Long-Term Debt was $6,677 Mil.
Total Current Assets was $8,038 Mil.
Total Current Liabilities was $5,025 Mil.

Profitability

Question 1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Goodyear Tire & Rubber Co's current net income (TTM) was 2,706. ==> Positive ==> Score 1.

Question 2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Goodyear Tire & Rubber Co's current cash flow from operations (TTM) was 1,748. ==> Positive ==> Score 1.

Question 3. 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.

Goodyear Tire & Rubber Co's return on assets of this year was 0.1597214. Goodyear Tire & Rubber Co's return on assets of last year was 0.03278877. ==> This year is higher. ==> Score 1.

Question 4. 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 2,706. Goodyear Tire & Rubber Co's current cash flow from operations (TTM) was 1,748. ==> 1,748 <= 2,706 ==> CFROA <= ROA ==> Score 0.

Funding

Question 5. Change in Gearing or Leverage

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

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

Gearing (This Year: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=5746/17311.8
=0.33191234

Gearing (Last Year: Jun14)=Long-Term Debt/Average Total Assets from Jun13 to Jun14
=6677/17323.4
=0.38543242

Goodyear Tire & Rubber Co's gearing of this year was 0.33191234. Goodyear Tire & Rubber Co's gearing of last year was 0.38543242. ==> This year is lower or equal to last year. ==> Score 1.

Question 6. 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: Jun15)=Total Current Assets/Total Current Liabilities
=7695/4741
=1.6230753

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

Goodyear Tire & Rubber Co's current ratio of this year was 1.6230753. Goodyear Tire & Rubber Co's current ratio of last year was 1.59960199. ==> This year's current ratio is higher. ==> Score 1.

Question 7. 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 274. Goodyear Tire & Rubber Co's number of shares in issue last year was 281. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

Efficiency

Question 8. 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
=4260/17209
=0.24754489

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

Goodyear Tire & Rubber Co's gross margin of this year was 0.24754489. Goodyear Tire & Rubber Co's gross margin of last year was 0.22370229. ==> This year's gross margin is higher. ==> Score 1.

Question 9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by total assets at the beginning of 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)/Total Assets at the Beginning of This Year (Jun14)
=17209/16942
=1.01575965

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun13)
=18918/17384
=1.08824206

Goodyear Tire & Rubber Co's asset turnover of this year was 1.01575965. Goodyear Tire & Rubber Co's asset turnover of last year was 1.08824206. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+1+0+1+1+1+1+0
=7

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Goodyear Tire & Rubber Co has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.


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


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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1010001111
Question 2 1110111111
Question 3 1010011011
Question 4 1100111110
Question 5 0011001100
Question 6 0100101010
Question 7 1101100101
Question 8 1010010111
Question 9 0100011000
F-score 6552457665

Goodyear Tire & Rubber Co Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Question 1 1111111111
Question 2 1111111111
Question 3 1111111111
Question 4 1111000000
Question 5 0000000011
Question 6 0001000011
Question 7 0010110101
Question 8 1111111111
Question 9 0000000000
F-score 5566554567
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