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Cooper Tire Financial Analysis Paper

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Final Analysis: Cooper Tire & Rubber Company For a beginner, understanding the massive amount of data provided by a company’s financial information can be extremely daunting. Where does one find the financial data? It is easy to find financial data on firms; publicly held companies are required by the United States Securities and Exchange Commission (SEC). Typically, a company files reports to the SEC throughout the year. The form 8-K is for current reports, form 10-Q is for quarterly reports and the 10-K is for annual reports (U.S. Securities and Exchange Commission, 2009). One can find a company’s SEC, 10-K filing on the EDGAR database (U.S. Securities and Exchange Commission, 2009) or it can often be found on the company’s website. …show more content…

Depending on the situation, not all ratios have the same significance, for example, an investor would look at a company’s profitability ratios, while a manager may focus on operational ratios such as inventory turns. Creditors would be more interested in a company’s ratios that show how well the company can pay its bills. There are also more complex ratios such as the DuPont Analysis and Altman’s Z-Score that can be used to get a clearer vision of a company’s financial status. Finally, it is good to review ratios from a company’s previous year(s) performance and how they stack up against competitors. For example, Altman’s Z-score is a ratio that looks at how close a company is to becoming bankrupt. All financial reviewers should be interested in this ratio as it shows how well a company is doing and if it is in danger of bankruptcy. If a company is close to going bankrupt, then one would probably not want to invest in the company; however, the company may be a prime suspect for a buyout or acquisition. Some of the more common and complex ratios for Cooper Tire & Rubber Company (CTB) will be discussed …show more content…

One cannot simply look at sales or profits and deduce whether the company is strong financially and a good candidate for investment(s), providing loans, or how operationally effective a company is. On the contrary, there is a myriad of information that can be overwhelming to review. Thankfully, there are ratios, which can help a person to quickly review and decipher a company’s current financial stability. After a good firm is chosen, then a wise investor will review the company’s 10-K (annual report) and decide for themselves if it is a good risk for investment. The income statement, balance sheet, and cash flows can quickly be obtained on the internet using yahoo finance and many other websites to quickly make a decision on your own. There are many other pay-sites where the common ratios and complex calculations, such as Altman’s Z-score and DuPont Analysis are already calculated. The ratios and complex calculations; along with the company’s 10-K yearly report can provide enough information that a good financial decision can be made. After a thorough review of Cooper Tire & Rubber Company, it has been an eye-opening exercise as to the complexity and nuance of financial

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