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Goodyear Tire & Rubber Co (NAS:GT)
Beneish M-Score
-2.48 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Goodyear Tire & Rubber Co has a M-score of -2.48 suggests that the company is not a manipulator.

GT' s 10-Year Beneish M-Score Range
Min: -3.22   Max: -1.84
Current: -2.48

-3.22
-1.84

During the past 13 years, the highest Beneish M-Score of Goodyear Tire & Rubber Co was -1.84. The lowest was -3.22. And the median was -2.61.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Goodyear Tire & Rubber Co for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.9894+0.528 * 0.8612+0.404 * 1.0465+0.892 * 0.9383+0.115 * 0.975
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0755+4.679 * 0.0318-0.327 * 1.0557
=-2.48

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

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $3,021 Mil.
Revenue was 4657 + 4656 + 4469 + 4791 = $18,573 Mil.
Gross Profit was 1141 + 1124 + 951 + 1101 = $4,317 Mil.
Total Current Assets was $8,047 Mil.
Total Assets was $16,656 Mil.
Property, Plant and Equipment(Net PPE) was $7,092 Mil.
Depreciation, Depletion and Amortization(DDA) was $736 Mil.
Selling, General & Admin. Expense(SGA) was $2,754 Mil.
Total Current Liabilities was $4,773 Mil.
Long-Term Debt was $6,719 Mil.
Net Income was 161 + 213 + -51 + 235 = $558 Mil.
Non Operating Income was -85 + -8 + -209 + 33 = $-269 Mil.
Cash Flow from Operations was 195 + 409 + -1543 + 1236 = $297 Mil.
Accounts Receivable was $3,254 Mil.
Revenue was 5002 + 4894 + 4853 + 5045 = $19,794 Mil.
Gross Profit was 1056 + 1048 + 913 + 945 = $3,962 Mil.
Total Current Assets was $9,069 Mil.
Total Assets was $17,672 Mil.
Property, Plant and Equipment(Net PPE) was $7,065 Mil.
Depreciation, Depletion and Amortization(DDA) was $713 Mil.
Selling, General & Admin. Expense(SGA) was $2,729 Mil.
Total Current Liabilities was $5,184 Mil.
Long-Term Debt was $6,366 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(3021 / 18573) / (3254 / 19794)
=0.16265547 / 0.16439325
=0.9894

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(1124 / 19794) / (1141 / 18573)
=0.20016167 / 0.23243418
=0.8612

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (8047 + 7092) / 16656) / (1 - (9069 + 7065) / 17672)
=0.09107829 / 0.08703033
=1.0465

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=18573 / 19794
=0.9383

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(713 / (713 + 7065)) / (736 / (736 + 7092))
=0.09166881 / 0.09402146
=0.975

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(2754 / 18573) / (2729 / 19794)
=0.14827976 / 0.13787006
=1.0755

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((6719 + 4773) / 16656) / ((6366 + 5184) / 17672)
=0.68996158 / 0.65357628
=1.0557

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(558 - -269 - 297) / 16656
=0.0318

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Goodyear Tire & Rubber Co has a M-score of -2.48 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


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
DSRI 1.06880.94250.85581.05780.81761.20640.93240.86130.97571.0207
GMI 0.89550.98441.22440.84611.10581.06720.89721.03550.95020.8655
AQI 0.74670.87460.92940.78951.01861.10610.97550.90031.09410.9964
SGI 1.21530.98611.03611.04760.99210.83651.15531.2090.9220.9308
DEPI 1.09261.00710.98921.15970.94261.06821.02630.94841.12191.0012
SGAI 0.94560.98171.04410.92280.94891.10540.9470.88751.04461.0901
LVGI 1.03661.08971.01040.79341.11880.98151.07220.98720.98941.0611
TATA -0.0368-0.0413-0.0540.03680.0518-0.1121-0.0603-0.0193-0.0395-0.0098
M-score -2.55-2.82-2.76-2.28-2.39-2.89-2.76-2.52-2.74-2.68

Goodyear Tire & Rubber Co Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.8420.90850.97570.96481.01471.00021.02071.02241.04580.9894
GMI 1.01621.03040.95020.91380.90280.86660.86550.86590.85920.8612
AQI 1.02711.10161.09411.05911.04241.05770.99641.06051.0831.0465
SGI 1.06520.97630.9220.88710.89420.91510.93080.94310.94330.9383
DEPI 1.04331.10011.12191.0641.0191.01231.00121.00931.01540.975
SGAI 0.91530.97681.02461.06391.09191.09041.09011.09141.09631.0755
LVGI 1.01260.98550.98941.0841.07661.05661.06111.05971.04411.0557
TATA -0.0308-0.0567-0.0395-0.0237-0.0313-0.0286-0.01120.02350.03040.0318
M-score -2.68-2.77-2.73-2.78-2.78-2.77-2.68-2.48-2.42-2.48
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