E4-27.Compute and Interpret Z-scores Following is selected financial infonnation for Proct er & Gamble Co. and Kimberly-Clark from their fiscal 2019 financial statements.

$millions Procter & Gamble Kimberly-Clark Working capital .. .. .. .. . ... . .. .. .. .. .. . ..... .

Retained earnings . . .......... .. ............ .

Earnings before interest and tax .. .. . .. . . .. . .. .. .

Market value of equity . . .. .. .......... . .... .. .

Sales ..... . .. .. .. .. .. . ... . .. .. .. .. .. . .. . .. .

Total assets .. ...... . .. . .. . .... . . .. .... .. .. .

Total liabilities . .. .. . .......... . ............. .

$ (7,538)

94,918 5,487 274,646 67,684 115,095 67,516

a. Compute and compare the Altman Z-scores for each company.

b. Is either company likely to go bankrupt in the short tenn? Explain.

$ (1 ,862)

6,686 2,991 46,966 18,450 15,283 15,089