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Goodyear Tire & Rubber Co (NAS:GT)
Beneish M-Score
-2.68 (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 -2.68 suggests that the company is not a manipulator.

GT' s 10-Year Beneish M-Score Range
Min: -3.22   Max: -1.84
Current: -2.68

-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 -2.63.


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 * 1.0207+0.528 * 0.8655+0.404 * 0.9964+0.892 * 0.9308+0.115 * 1.0012
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0901+4.679 * -0.0098-0.327 * 1.0611
=-2.68

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

This Year (Dec13) TTM:Last Year (Dec12) TTM:
Accounts Receivable was $2,435 Mil.
Revenue was 4791 + 5002 + 4894 + 4853 = $19,540 Mil.
Gross Profit was 1101 + 1056 + 1048 + 913 = $4,118 Mil.
Total Current Assets was $8,644 Mil.
Total Assets was $17,527 Mil.
Property, Plant and Equipment(Net PPE) was $7,320 Mil.
Depreciation, Depletion and Amortization(DDA) was $722 Mil.
Selling, General & Admin. Expense(SGA) was $2,758 Mil.
Total Current Liabilities was $5,025 Mil.
Long-Term Debt was $6,162 Mil.
Net Income was 235 + 173 + 188 + 33 = $629 Mil.
Non Operating Income was -8 + -6 + 7 + -131 = $-138 Mil.
Cash Flow from Operations was 1236 + 164 + 475 + -937 = $938 Mil.
Accounts Receivable was $2,563 Mil.
Revenue was 5045 + 5264 + 5150 + 5533 = $20,992 Mil.
Gross Profit was 945 + 949 + 1009 + 926 = $3,829 Mil.
Total Current Assets was $8,498 Mil.
Total Assets was $16,973 Mil.
Property, Plant and Equipment(Net PPE) was $6,956 Mil.
Depreciation, Depletion and Amortization(DDA) was $687 Mil.
Selling, General & Admin. Expense(SGA) was $2,718 Mil.
Total Current Liabilities was $5,322 Mil.
Long-Term Debt was $4,888 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)
=(2435 / 19540) / (2563 / 20992)
=0.12461617 / 0.12209413
=1.0207

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)
=(1056 / 20992) / (1101 / 19540)
=0.18240282 / 0.21074719
=0.8655

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 - (8644 + 7320) / 17527) / (1 - (8498 + 6956) / 16973)
=0.0891767 / 0.08949508
=0.9964

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
=19540 / 20992
=0.9308

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))
=(687 / (687 + 6956)) / (722 / (722 + 7320))
=0.08988617 / 0.08977866
=1.0012

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)
=(2758 / 19540) / (2718 / 20992)
=0.14114637 / 0.1294779
=1.0901

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)
=((6162 + 5025) / 17527) / ((4888 + 5322) / 16973)
=0.63827238 / 0.60154363
=1.0611

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
=(629 - -138 - 938) / 17527
=-0.0098

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 -2.68 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

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
DSRI 0.95110.86130.8670.8420.90850.97570.96481.01471.00021.0207
GMI 1.03121.03551.02331.01621.03040.95020.91380.90280.86660.8655
AQI 0.84490.90030.98531.02711.10161.09411.05911.04241.05770.9964
SGI 1.21761.2091.1471.06520.97630.9220.88710.89420.91510.9308
DEPI 0.97950.94840.99131.04331.10011.12191.0641.0191.01231.0012
SGAI 1.00040.88820.90640.89960.94531.04461.08471.11411.12321.0901
LVGI 1.03140.98721.01211.01260.98550.98941.0841.07661.05661.0611
TATA 0.019-0.0195-0.0021-0.0308-0.0567-0.0395-0.0238-0.031-0.0295-0.0098
M-score -2.30-2.52-2.46-2.67-2.77-2.74-2.78-2.78-2.78-2.68
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