Financial Position of Goodyear

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Financial Report - Goodyear
Financial Report - Goodyear
2012
30.10.2012
2012
30.10.2012

Chris Schone
Pieter Steins Bisschop
Alexander Schieving
Joy Ma
Marijana Stanimirovic
Danielle van der Zwan
[Skriv inn innhold for sidestolpen. En sidestolpe er et frittstående tillegg til hoveddokumentet. Det er ofte justert mot venstre eller høyre side av siden, eller plassert øverst eller nederst.] Chris Schone

Pieter Steins Bisschop
Alexander Schieving
Joy Ma
Marijana Stanimirovic
Danielle van der Zwan
[Skriv inn innhold for sidestolpen. En sidestolpe er et frittstående tillegg til hoveddokumentet. Det er ofte justert mot venstre eller høyre side av siden, eller plassert øverst eller nederst.]

Executive summary

As a result of analyzing the financial position of Goodyear it can be concluded that the company holds certain risks to invest in. Conducted analysis indicates that Goodyear is neither highly profitable nor efficient in terms of the profit gained from its assets. The liquidity is quite low compared to one of their main competitor Michelin. Considering the performance of the stock price Goodyear experienced three drops. The first drop was in 2006 following a big drop in 2009 and lastly a drop in the summer of 2012. Although from August 2012 onwards there is a recovery of the stock price and most analysts find that investors should either hold on to or buy the stocks. Goodyear is, as stated later, underperforming compared to the competition and its sector. Therefore it can be concluded that in despite of the positive outlook, at least the next coming year, Goodyear’s stock price has been underperforming, which is being discussed more thoroughly in chapter 4 of this report. As a whole it can be clarified that Goodyear is not a reliable company to invest in and will probably not be in near and far future. The reason for this negative advice is based on several factors explained in chapter 5.

Table of Contents
Executive summary2
Chapter 1 - Introduction4
Chapter 2 – The Company5
Organizational structure5
Market conditions:5
Chapter 3 – The literature search6
Chapter 4 – The data and its analysis Analysis of the financial strength and weaknesses7
Review of the market perception12
Chapter 5 – Conclusions and recommendations15
Bibliography17
Appendix19
Appendix A; Income statement Goodyear 2010 - 201119
Appendix B; Balance sheet Goodyear 2010 - 201120
Appendix C; Financial overview Goodyear 2010 - 201121
Appendix D; Michelin main figures 2010 - 201121
Appendix E; Consolidated income statement Michelin 2010 - 201122
Appendix F; Calculation’s ratio’s and raw figures of Michelin and Goodyear 2010 – 201222
Appendix G; Ratio’s Goodyear and Michelin 2007 - 201123

Chapter 1 - Introduction

The objective of this report is to analyze the financial position of a stock exchange listed company for potential investment. After reading this report, investors should have a solid idea of the financial situation of Goodyear compared to another tire company, Michelin. The aim is to show the trend of the market combined with the financial trend of Goodyear compared to Michelin and to include some predictions for the near future to be able to determine whether or not Goodyear is a good investment. The main focus of this report analysis will be on the Goodyear Tire & Rubber Company (GT) that is listed on the New York Stock Exchange. Goodyear is one of the world’s leading tire companies, with operations in most regions of the world and was founded in 1898. Together with its U.S. and international subsidiaries and joint ventures, Goodyear develops, manufactures, markets and distributes tires for most applications. They also manufacture and markets rubber-related chemicals for various applications, as of 2012, Goodyear manufacture its products in 53 facilities in 22 countries. The source data that is collected for this report mainly originates from the annual...
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