Goodyear Tire & Rubber Co (GT)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Inventory turnover	5.45	5.08	4.62	4.43	4.36	3.99	4.32	4.42	4.59	4.47	4.26	5.58	6.10	6.08	5.37	4.78	4.96	4.77	4.58	4.84
Receivables turnover	7.12	5.85	6.58	6.27	7.80	5.63	5.95	5.73	7.15	4.92	5.05	5.75	7.07	5.35	7.16	6.86	7.44	5.31	5.96	6.10
Payables turnover	4.66	4.90	4.62	4.53	4.15	3.96	4.13	4.11	3.98	3.89	3.66	4.33	4.46	5.61	7.15	5.27	4.86	5.33	5.15	5.20
Working capital turnover	38.68	9.97	10.40	9.13	13.35	8.04	9.36	11.41	23.75	12.78	15.55	20.17	23.26	15.01	15.72	15.31	22.32	8.65	8.66	10.63

The inventory turnover ratio for Goodyear Tire & Rubber Co. has been gradually increasing over the past few quarters, indicating that the company is efficiently managing its inventory and selling through its products at a faster rate. This signifies effective inventory management and potentially lower holding costs.

The receivables turnover ratio shows a fluctuating trend, with variations in the speed at which the company is collecting its accounts receivables. A higher turnover ratio indicates that Goodyear is collecting its receivables more quickly, which could improve cash flow and reduce the risk of bad debts.

On the other hand, the payables turnover ratio has been relatively stable, indicating that the company is managing its accounts payables consistently. A lower payables turnover ratio suggests that Goodyear is taking more time to pay its suppliers, potentially preserving cash for other uses.

The working capital turnover ratio has shown significant fluctuations over the quarters, with a sharp increase in Q4 2023. A higher working capital turnover ratio indicates that Goodyear is effectively utilizing its working capital to generate sales revenue. This could signify efficient management of current assets and liabilities to drive business operations.

Overall, the activity ratios analysis suggests that Goodyear Tire & Rubber Co. is effectively managing its inventory, receivables, payables, and working capital to support its operational efficiency and financial performance.

Average number of days

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	66.99	71.87	79.03	82.48	83.73	91.52	84.43	82.49	79.44	81.59	85.60	65.46	59.86	60.05	68.00	76.38	73.59	76.58	79.69	75.34
Days of sales outstanding (DSO)	days	51.23	62.38	55.49	58.18	46.81	64.88	61.33	63.69	51.03	74.24	72.24	63.52	51.63	68.26	50.95	53.22	49.07	68.73	61.29	59.80
Number of days of payables	days	78.37	74.51	79.05	80.65	87.98	92.08	88.35	88.90	91.68	93.89	99.65	84.27	81.89	65.02	51.07	69.21	75.06	68.47	70.90	70.14

The activity ratios for Goodyear Tire & Rubber Co. provide insights into how efficiently the company is managing its inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH):
- The company's DOH has shown a decreasing trend over the quarters, which is generally a positive sign as it indicates that inventory is being managed more efficiently.
- However, the DOH figures are still relatively high, suggesting that Goodyear may have excess inventory levels that could potentially lead to higher storage and obsolescence costs.

2. Days of Sales Outstanding (DSO):
- The DSO ratio has fluctuated throughout the quarters, indicating variability in the speed of collecting accounts receivable.
- The downward trend in DSO from Q4 2022 to Q1 2023 shows improvement in collecting payments from customers, which is a positive sign for liquidity and cash flow management.

3. Number of Days of Payables:
- The number of days of payables has been relatively stable over the quarters, with mild fluctuations. This suggests that Goodyear has been maintaining consistent payment terms with its suppliers.
- The decreasing trend in Q1 2023 compared to the previous quarters indicates that the company is taking longer to pay its suppliers, which could be a deliberate strategy or a reflection of cash flow constraints.

Overall, while Goodyear has made strides in managing its inventory and collections more efficiently, there may be opportunities to further optimize inventory levels and payment cycles to improve working capital management and overall financial performance.

Long-term

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Fixed asset turnover	2.35	0.97	0.99	1.02	1.05	1.06	1.03	0.95	0.89	0.81	0.73	0.70	0.67	0.69	0.72	0.80	0.83	2.08	2.05	2.07
Total asset turnover	0.90	0.88	0.87	0.88	0.91	0.86	0.86	0.82	0.80	0.73	0.67	0.75	0.72	0.74	0.78	0.83	0.84	0.80	0.80	0.82

Goodyear Tire & Rubber Co.'s long-term activity ratios provide insights into how efficiently the company is utilizing its fixed assets and total assets to generate sales revenue. The fixed asset turnover ratio measures the company's ability to generate sales from its investment in fixed assets. It shows a declining trend from Q4 2022 to Q1 2023, indicating a slightly decreasing efficiency in utilizing fixed assets to generate sales. However, the ratio remains relatively stable around 2.4 on average, indicating that the company is effectively generating sales from its fixed assets.

On the other hand, the total asset turnover ratio measures how efficiently the company is using all its assets to generate sales. The ratio fluctuates around 0.90 on average over the analyzed quarters, suggesting that the company is consistently generating sales revenue in proportion to its total assets. The improvement seen in Q4 2022 compared to Q1 2022 shows an uptrend in asset utilization efficiency.

Overall, Goodyear Tire & Rubber Co.'s long-term activity ratios indicate that the company is effectively utilizing its fixed assets and total assets to generate sales revenue, with room for improvement in enhancing efficiency in asset turnover.