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Goodyear Tire & Rubber Co (NAS:GT)
Beneish M-Score
-2.63 (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 -2.02 signals that the company is a manipulator.

GT' s Beneish M-Score Range Over the Past 10 Years
Min: -3.22   Max: -1.59
Current: -2.63

-3.22
-1.59

During the past 13 years, the highest Beneish M-Score of Goodyear Tire & Rubber Co was -1.59. The lowest was -3.22. And the median was -2.60.


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 * 0.961+0.528 * 0.904+0.404 * 1.8304+0.892 * 0.9011+0.115 * 0.989
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0441+4.679 * 0.0552-0.327 * 0.8584
=-2.02

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

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $2,616 Mil.
Revenue was 4184 + 4172 + 4024 + 4356 = $16,736 Mil.
Gross Profit was 1184 + 1145 + 958 + 1016 = $4,303 Mil.
Total Current Assets was $7,922 Mil.
Total Assets was $17,515 Mil.
Property, Plant and Equipment(Net PPE) was $6,673 Mil.
Depreciation, Depletion and Amortization(DDA) was $701 Mil.
Selling, General & Admin. Expense(SGA) was $2,591 Mil.
Total Current Liabilities was $4,783 Mil.
Long-Term Debt was $5,591 Mil.
Net Income was 271 + 192 + 224 + 2129 = $2,816 Mil.
Non Operating Income was -25 + -67 + 107 + -80 = $-65 Mil.
Cash Flow from Operations was 361 + 536 + -262 + 1279 = $1,914 Mil.
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.



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)
=(2616 / 16736) / (3021 / 18573)
=0.15630975 / 0.16265547
=0.961

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)
=(1145 / 18573) / (1184 / 16736)
=0.23243418 / 0.25711042
=0.904

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 - (7922 + 6673) / 17515) / (1 - (8047 + 7092) / 16656)
=0.16671424 / 0.09107829
=1.8304

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
=16736 / 18573
=0.9011

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))
=(736 / (736 + 7092)) / (701 / (701 + 6673))
=0.09402146 / 0.09506374
=0.989

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)
=(2591 / 16736) / (2754 / 18573)
=0.15481597 / 0.14827976
=1.0441

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)
=((5591 + 4783) / 17515) / ((6719 + 4773) / 16656)
=0.59229232 / 0.68996158
=0.8584

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
=(2816 - -65 - 1914) / 17515
=0.0552

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 -2.02 signals that the company is likely to 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

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.94250.85581.05780.81761.20640.93240.86130.97571.02070.9406
GMI 0.98441.22440.84611.10581.06720.89721.03550.95020.86550.9032
AQI 0.87460.92940.78951.01861.10610.97550.90031.09410.99642.0014
SGI 0.98611.03611.04760.99210.83651.15531.2090.9220.93080.9282
DEPI 1.00710.98921.15970.94261.06821.02630.94841.12191.00120.9671
SGAI 0.98171.04410.92280.94891.20980.94420.81331.04461.09011.0625
LVGI 1.08971.01040.79341.11880.98151.07220.98720.98941.06110.9475
TATA -0.0413-0.0540.03680.0518-0.1121-0.0603-0.0193-0.0395-0.00640.1401
M-score -2.82-2.76-2.28-2.39-2.90-2.76-2.50-2.74-2.66-1.59

Goodyear Tire & Rubber Co Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
DSRI 1.01471.00021.02071.02241.04580.98940.94060.93770.95810.961
GMI 0.90280.86660.86550.86590.85920.86120.90320.90550.90370.904
AQI 1.04241.05770.99641.06051.0831.04652.00141.9281.84441.8304
SGI 0.89420.91510.93080.94310.94330.93830.92820.92360.90970.9011
DEPI 1.0191.01231.00121.00931.01540.9750.96710.94770.9670.989
SGAI 1.09191.09041.09011.09141.09631.07551.06251.03631.02991.0441
LVGI 1.07661.05661.06111.05971.04411.05570.94750.84830.86680.8584
TATA -0.0313-0.0286-0.00790.02690.0360.03750.13980.06970.06180.0552
M-score -2.78-2.77-2.67-2.46-2.39-2.46-1.59-1.92-1.99-2.02
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