$1.$ This if for "you know what prep" please share screen shots of all excel files used and explain any equations or functions you used to get these answers, Thank you for your help Ill be sure to upvote!

Jun$-04$ Dec$-03$ Dec$-02$

Assets

Unrestricted Cash and Cash Equivalents $1,3771,640886$

Restricted Cash $838679462$

Short$-$term Investments $1178388$

Other Current Assets $1,8631,6271,643$

Total Current Assets $$4,089$ $$4,024$ $$3,379$

Operating Property and Equipment $17,90618,00519,588$

Less: Accumulated Depreciation $5,3985,1325,306$

Net Operating Property and Equipment $$12,508$ $$12,873$ $$14,282$

Capital Leases $2,7202,7202,573$

Less: Accumulated Depreciation $605555494$

Net Capital Leases $$2,115$ $$2,165$ $$2,079$

Other Long Term Assets $2,8532,9173,916$

Total Assets $$21,565$ $$21,979$ $$23,656$

Liabilities $($Not Subject to Compromise$)$

Long$-$term Debt maturing within one year $4606630$

Current Obligations under Capital Leases $0260$

Other Current Liabilities $5,7805,4233,991$

Total Current Liabilities $$6,240$ $$6,112$ $$3,991$

Long$-$term debt $1720700$

Long$-$term obligations under capital leases $1541630$

Deferred pension liabilitya $4,9884,7474,661$

Postretirement benefit liabilityb $1,9991,9241,809$

Other $9839851,143$

Total Long Term Liabilities $$8,296$ $$7,819$ $$8,313$

Liabilities Subject to Compromise $13,65313,96413,833$

Capital Stock $307309936$

Retained Earnings $-6,931-6,225-3,417$

Total Liabilities and Shareholders' Equity $$21,565$ $$21,979$ $$23,656$

Exhibit $2$ UAL Corporation, Income and Cash Flows $($$ millions$)$

$6$ Months Ending $12$ Months Endinga

Jun$-04$ Jun$-03$ Dec$-03$ Dec$-02$

Income Statement

Passenger Revenues $6,8265,17311,64211,872$

Other Revenues $9471,1202,0822,414$

Total Revenue $$7,773$ $$6,293$ $$13,724$ $$14,286$

Salaries and Related Costs $2,4572,9355,2647,029$

Aircraft Fuel $1,2961,0232,0721,921$

Other $4,2243,5797,7488,173$

Total Operating Expenses $$7,977$ $$7,537$ $$15,084$ $$17,123$

Operating Income $-204-1,244-1,360-2,837$

Interest Expense $221235469505$

Other $281487979-137$

Earnings Before Tax $($$$706)($$$1,966)($$$2,808)($$$3,205)$

Taxes $0000$

Net Income $($$$706)($$$1,966)($$$2,808)($$$3,205)$

Statement of Cash Flows

Net Income $-2,808-3,202$

Depreciation & Amortization $938970$

Pension funding less than $($greater than$)$ expense $610451$

Deferred postretirement benefit expense $367339$

Other Non$-$Cash Items $($Including Reorg. Expenses$)1,327799$

Change in Working Capital $385-496$

Cash From Operations $$360$ $$567$ $$819($$$1,139)$

Additions to property and equipment $-150-56-150-157$

Proceeds on sale of prop. and equip. $1367123364$

Other $-141-59298-136$

Cash From Investing Activities $($$$278)($$$48)$ $$271$ $$71$

Proceeds from long$-$term debt issued $0950$

Proceeds from DIP financing $10123252700$

Repayment of long$-$term debt $-89-59-257-1,338$

Repayment of DIP financing $-241-153-2890$

Principal payments under capital leases $-185-72-270-220$

Other $16028228174$

Cash From Financing Activities $($$$345)($$$133)($$$336)$ $$266$

Net Change in Cash $($$$263)$ $$386$ $$754($$$802)$

Source: UAL Corporation SEC Filings.

aThe fiscal year ended $2003$ reflected a portion of UAL$$s expense saving initiatives. Operating expenses decreased by $$2$ billion. $$1\mathrm{.}4$ billion of these savings were due to lower volumes $($available seat miles decreased by $8\mathrm{.}2\%$ in $2003).$ Thus, the $2003$ results included real expense reductions of $$600$ million. Excluding the increase in fuel expense, operating expense reductions totaled approximately $$750$ million. $($Source: Casewriter estimates$)$

Based on Exhibit $1$ and $2$ answer the following questions

$1.$ Compute the Z$-$score for December $2003.$ Based on the Z$-$score do you predict bankruptcy for United?

$2.$ What is flow based and stock based insolvency? Does United suffer from Flow based or Stock based insolvency or both? Explain.

$3.$ What are DIP loans? Where do you DIP loans fall in the APR?

$4.$ Is there any strategic reason for United to carry a lot of debt in its capital structur

$5.$ Why do so many firms like United file for legal bankruptcy when private workouts are so much less expensive?