Goodyear Tire Rubber GOODYEAR Bond
GT Stock | USD 11.93 0.12 1.00% |
Goodyear Tire Rubber holds a debt-to-equity ratio of 1.768. At this time, Goodyear Tire's Net Debt is comparatively stable compared to the past year. Net Debt To EBITDA is likely to gain to 5.18 in 2024, whereas Long Term Debt is likely to drop slightly above 5.5 B in 2024. Goodyear Tire's financial risk is the risk to Goodyear Tire stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).
Asset vs Debt
Equity vs Debt
Goodyear Tire's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Goodyear Tire's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the Company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps Goodyear Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Goodyear Tire's stakeholders.
For most companies, including Goodyear Tire, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running Goodyear Tire Rubber the most critical issue when dealing with liquidity needs is whether the current assets are properly aligned with its current liabilities. If not, management will need to obtain alternative financing to ensure that there are always enough cash equivalents on the balance sheet in reserve to pay for obligations.
Price Book 0.7469 | Book Value 16.449 | Operating Margin 0.0463 | Profit Margin (0.03) | Return On Assets 0.0152 |
Goodyear |
Given the importance of Goodyear Tire's capital structure, the first step in the capital decision process is for the management of Goodyear Tire to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Goodyear Tire Rubber to issue bonds at a reasonable cost.
Popular Name | Goodyear Tire GOODYEAR TIRE RUBR |
Specialization | Automobiles & Components |
Equity ISIN Code | US3825501014 |
Bond Issue ISIN Code | US382550AD35 |
S&P Rating | Others |
Maturity Date | 15th of March 2028 |
Issuance Date | 16th of March 1998 |
Coupon | 7.0 % |
Goodyear Tire Rubber Outstanding Bond Obligations
GOODYEAR TIRE RUBR | US382550AD35 | Details | |
Goodyear Tire Rubber | US382550BG56 | Details | |
GOODYEAR TIRE RUBR | US382550BH30 | Details | |
Goodyear Tire Rubber | US382550BF73 | Details | |
US382550BK68 | US382550BK68 | Details | |
US382550BJ95 | US382550BJ95 | Details | |
GT 5 15 JUL 29 | US382550BN08 | Details | |
GT 525 15 JUL 31 | US382550BR12 | Details |
Understaning Goodyear Tire Use of Financial Leverage
Goodyear Tire financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Goodyear Tire's total debt position, including all of outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Goodyear Tire assets, the company is considered highly leveraged. Understanding the composition and structure of overall Goodyear Tire debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business and if it is worth investing in it. Financial leverage can amplify the potential profits to Goodyear Tire's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Goodyear Tire's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets).
Last Reported | Projected for Next Year | ||
Short and Long Term Debt Total | 8.6 B | 4.9 B | |
Net Debt | 7.7 B | 8.1 B | |
Short Term Debt | 993 M | 664.2 M | |
Long Term Debt | 6.8 B | 5.5 B | |
Long Term Debt Total | 8.4 B | 6 B | |
Short and Long Term Debt | 793 M | 698.8 M | |
Net Debt To EBITDA | 4.93 | 5.18 | |
Debt To Equity | 1.85 | 1.95 | |
Interest Debt Per Share | 32.21 | 19.09 | |
Debt To Assets | 0.40 | 0.25 | |
Long Term Debt To Capitalization | 0.62 | 0.48 | |
Total Debt To Capitalization | 0.65 | 0.50 | |
Debt Equity Ratio | 1.85 | 1.95 | |
Debt Ratio | 0.40 | 0.25 | |
Cash Flow To Debt Ratio | 0.12 | 0.11 |
Goodyear Tire Investors Sentiment
The influence of Goodyear Tire's investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in Goodyear. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock market does not have solid backing from leading economists and market statisticians.
Investor biases related to Goodyear Tire's public news can be used to forecast risks associated with an investment in Goodyear. The trend in average sentiment can be used to explain how an investor holding Goodyear can time the market purely based on public headlines and social activities around Goodyear Tire Rubber. Please note that most equities that are difficult to arbitrage are affected by market sentiment the most.
Goodyear Tire's market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Goodyear Tire's and other traded tickers. The bigger the bubble, the more accurate is the estimated score. Higher bars for a given day show more participation in the average Goodyear Tire's news discussions. The higher the estimated score, the more favorable is the investor's outlook on Goodyear Tire.
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards Goodyear Tire in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, Goodyear Tire's short interest history, or implied volatility extrapolated from Goodyear Tire options trading.
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Complementary Tools for Goodyear Stock analysis
When running Goodyear Tire's price analysis, check to measure Goodyear Tire's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Goodyear Tire is operating at the current time. Most of Goodyear Tire's value examination focuses on studying past and present price action to predict the probability of Goodyear Tire's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Goodyear Tire's price. Additionally, you may evaluate how the addition of Goodyear Tire to your portfolios can decrease your overall portfolio volatility.
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Is Goodyear Tire's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Goodyear Tire. If investors know Goodyear will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Goodyear Tire listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth (0.66) | Earnings Share (2.42) | Revenue Per Share 70.407 | Quarterly Revenue Growth (0.05) | Return On Assets 0.0152 |
The market value of Goodyear Tire Rubber is measured differently than its book value, which is the value of Goodyear that is recorded on the company's balance sheet. Investors also form their own opinion of Goodyear Tire's value that differs from its market value or its book value, called intrinsic value, which is Goodyear Tire's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Goodyear Tire's market value can be influenced by many factors that don't directly affect Goodyear Tire's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Goodyear Tire's value and its price as these two are different measures arrived at by different means. Investors typically determine if Goodyear Tire is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Goodyear Tire's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
What is Financial Leverage?
Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.Leverage and Capital Costs
The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.Benefits of Financial Leverage
Leverage provides the following benefits for companies:- Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
- It provides a variety of financing sources by which the firm can achieve its target earnings.
- Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.