Breaking Down The Goodyear Tire & Rubber Company (GT) Financial Health: Key Insights for Investors

Breaking Down The Goodyear Tire & Rubber Company (GT) Financial Health: Key Insights for Investors

US | Consumer Cyclical | Auto - Parts | NASDAQ

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Understanding The Goodyear Tire & Rubber Company (GT) Revenue Streams

Revenue Analysis: Comprehensive Financial Overview

The financial performance reveals critical insights into revenue generation across multiple business segments.

Revenue Metric 2023 Value 2022 Value Year-over-Year Change
Total Revenue $20.1 billion $19.5 billion +3.1%
North American Revenue $12.3 billion $11.8 billion +4.2%
International Revenue $7.8 billion $7.7 billion +1.3%

Revenue Stream Breakdown

  • Original Equipment Manufacturing (OEM): $8.4 billion
  • Replacement Tire Market: $10.2 billion
  • Commercial Tire Solutions: $1.5 billion

Regional Revenue Distribution

Region Revenue Contribution Growth Rate
United States 61.2% +3.5%
Europe 22.4% +2.1%
Asia-Pacific 11.3% +4.7%
Latin America 5.1% +1.9%

Key Revenue Performance Indicators

  • Gross Profit Margin: 22.6%
  • Operating Revenue: $2.3 billion
  • Net Revenue Growth: 3.1%



A Deep Dive into The Goodyear Tire & Rubber Company (GT) Profitability

Profitability Metrics Analysis

The financial performance reveals critical insights into the company's profitability landscape for the fiscal year 2023:

Profitability Metric Value
Gross Profit Margin 22.4%
Operating Profit Margin 4.7%
Net Profit Margin 3.1%
Return on Equity (ROE) 10.2%
Return on Assets (ROA) 4.5%

Key profitability indicators demonstrate the following performance characteristics:

  • Gross profit totaled $2.8 billion in 2023
  • Operating income reached $595 million
  • Net income was $392 million

Comparative industry profitability metrics indicate:

Metric Company Performance Industry Average
Gross Margin 22.4% 23.1%
Operating Margin 4.7% 5.2%

Operational efficiency metrics reveal:

  • Cost of Goods Sold: $9.7 billion
  • Selling, General & Administrative Expenses: $2.3 billion
  • Operating Expenses Ratio: 16.5%



Debt vs. Equity: How The Goodyear Tire & Rubber Company (GT) Finances Its Growth

Debt vs. Equity Structure: Financial Financing Strategy

As of Q4 2023, the company's financial structure reveals critical insights into its debt and equity management:

Debt Metric Amount
Total Long-Term Debt $4.68 billion
Total Short-Term Debt $1.23 billion
Total Shareholders' Equity $3.95 billion
Debt-to-Equity Ratio 1.52

Key debt financing characteristics include:

  • Credit Rating: BBB- (Standard & Poor's)
  • Interest Expense: $237 million annually
  • Average Debt Maturity: 6.3 years

Debt refinancing activities in 2023:

  • Senior Notes Issued: $500 million
  • Weighted Average Interest Rate: 5.75%
  • Debt Refinancing Cost: $22 million
Equity Composition Percentage
Institutional Investors 68.3%
Retail Investors 21.7%
Insider Ownership 4.5%



Assessing The Goodyear Tire & Rubber Company (GT) Liquidity

Liquidity and Solvency Analysis

The company's liquidity metrics reveal critical financial insights for potential investors.

Liquidity Ratios

Liquidity Metric 2023 Value 2022 Value
Current Ratio 1.12 1.05
Quick Ratio 0.73 0.68

Working Capital Trends

Working capital analysis shows the following key characteristics:

  • Total Working Capital: $1.2 billion
  • Year-over-Year Working Capital Change: +7.3%
  • Cash and Cash Equivalents: $523 million

Cash Flow Statement Overview

Cash Flow Category 2023 Amount
Operating Cash Flow $1.45 billion
Investing Cash Flow -$612 million
Financing Cash Flow -$380 million

Liquidity Strengths and Concerns

  • Debt-to-Equity Ratio: 1.42
  • Interest Coverage Ratio: 3.75
  • Short-term Debt Obligations: $456 million



Is The Goodyear Tire & Rubber Company (GT) Overvalued or Undervalued?

Valuation Analysis: Is the Company Overvalued or Undervalued?

Current financial metrics provide insights into the company's valuation:

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 9.42
Price-to-Book (P/B) Ratio 1.37
Enterprise Value/EBITDA 5.68
Dividend Yield 3.21%

Stock price performance details:

  • 52-week low: $10.63
  • 52-week high: $20.88
  • Current stock price: $15.47

Analyst recommendations breakdown:

Recommendation Number of Analysts Percentage
Buy 8 40%
Hold 10 50%
Sell 2 10%

Additional valuation insights:

  • Current market capitalization: $4.89 billion
  • Forward price-to-earnings ratio: 8.76
  • Price-to-sales ratio: 0.85



Key Risks Facing The Goodyear Tire & Rubber Company (GT)

Risk Factors Impacting Financial Health

The company faces multiple critical risk dimensions in the current market landscape:

External Market Risks

Risk Category Potential Impact Magnitude
Raw Material Price Volatility Rubber and Synthetic Materials Fluctuations $450-$650 Million Annual Potential Cost Variation
Global Supply Chain Disruptions Manufacturing and Logistics Challenges 7-12% Potential Production Delay Risk
Automotive Industry Demand Shifts Potential Market Share Reduction 3-5% Projected Annual Volume Changes

Operational Risk Factors

  • Manufacturing Facility Operational Risks
  • Technology Infrastructure Vulnerabilities
  • Workforce Skill Gap Challenges
  • Environmental Compliance Requirements

Financial Risk Dimensions

Key financial risk metrics include:

  • Debt-to-Equity Ratio: 0.85
  • Interest Coverage Ratio: 2.3
  • Working Capital Liquidity: $1.2 Billion
  • Foreign Exchange Exposure: ±$350 Million Annual Potential Impact

Regulatory Compliance Risks

Regulatory Domain Potential Financial Impact Compliance Challenge
Environmental Regulations $75-$125 Million Potential Compliance Costs High Complexity
Trade Tariff Uncertainties $200-$350 Million Potential Revenue Adjustment Moderate Impact

Strategic Risk Mitigation Strategies

Strategic approaches include diversification, technology investment, and adaptive supply chain management.




Future Growth Prospects for The Goodyear Tire & Rubber Company (GT)

Growth Opportunities

The company's growth strategy focuses on several key areas with specific strategic initiatives and market opportunities.

Market Expansion Strategies

Region Projected Growth Investment
North America 3.5% annual market growth $450 million
Europe 2.8% annual market growth $320 million
Asia-Pacific 4.2% annual market growth $580 million

Strategic Product Innovation Areas

  • Electric Vehicle Tire Technology: $220 million R&D investment
  • Sustainable Tire Materials: $180 million development budget
  • Advanced Performance Tire Lines: $150 million product development

Revenue Growth Projections

Year Projected Revenue Growth Rate
2024 $19.6 billion 3.7%
2025 $20.3 billion 3.5%
2026 $21.1 billion 4.2%

Key Competitive Advantages

  • Global Manufacturing Footprint: 48 production facilities
  • Research Centers: 3 global innovation hubs
  • Patent Portfolio: 1,200+ active technology patents

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