Goodyear Analysis

2439 words 10 pages
Goodyear Financial Analysis

Writing Assignment: Financial Analysis
Assume you are a savvy financial analyst researching companies in which to invest.
Select a U.S. publically-traded company you think might be a good investment and perform a financial analysis.

FIN 534: Financial Management - Quarter (Winter 2013)


March 12, 2013

Goodyear Financial Analysis

Company Overview

The Goodyear Tire & Rubber Company a leading manufacturer of tires is one of the best in the world and one of the most recognizable brand names in the world (Edgar). Goodyear has operations in most regions of the world with 52 manufacturing facilities in 22 countries, including the United States (Edgar).
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The profit improvement plan aims to:

• Target profitable segments where Goodyear has competitive advantages (Edgar); • Accelerate Goodyear's growth in emerging markets in the region (Edgar); and • Achieve $75 million to $100 million of productivity improvements through back-office consolidation, improved manufacturing efficiency and supply chain improvements (Edgar).

In addition, in order to address Goodyear's significant unfunded pension obligations, Goodyear has announced plans to fund Goodyear's U.S. pension plans once frozen (Edgar). See “Pension and Benefit Plans” for additional information (Edgar).

For the year ended December 31, 2012, Goodyear's net income was $212 million, compared to Goodyear net income of $343 million in 2011, and Goodyear's net income available to common shareholders was $183 million, compared to Goodyear's net income available to common shareholders of $321 million in 2011 (Edgar). Goodyear total segment operating income for 2012 was $1,248 million, compared to $1,368 million in 2011 (Edgar). The decrease in segment operating income was due primarily to lower tire volume, including the effects of under-absorbed overhead on increased conversion costs, and an increase in raw material costs, partially offset by improved price and product mix (Edgar).

Net sales were $21.0 billion in 2012, compared to $22.8


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