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Altmans original Z-score bankruptcy model takes five key ratios into account: a. working capital / total assets b. retained earnings / total assets c. earnings

Altmans original Z-score bankruptcy model takes five key ratios into account:

a. working capital / total assets

b. retained earnings / total assets

c. earnings before interest and taxes / total assets

d. market value of equity / total liabilities

e. sales / total assets

Discuss the reasons why these ratios are linked to the probability of going into bankruptcy, and comment on their relative importance.

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