b) Below is financial data for Dzigbordi Company limited for the year 20X1.

Current Assets

Current Liabilities

Total Assets

Market Value of Equity

Retained Earnings

Sales

Earnings before interest and taxes

Dzigbordi Company. (' million)

180.0

100.0

200.0

304 8

152.9

288.1

98.0

The value of total liabilities are estimated to be 85 percent of total assets value.

Using Altman's model for predicting financial distress, determine the Z score index

for Dzigbordi Company.

[14 marks]

From the answer above is the company likely to go into bankruptcy? Give reasons.

[2 marks]

c). From the summarized financial statement of Sikamperuff Company Ltd below for the years

20X1 and 20X2, determine:

the solvency of the company in 20X1 and 20X2 using two financial ratios. Comment

of your answers.

[10 marks]

the profitability of the company

in 20X1 and 20X2 using two financial

ratios

Comment on your answers for 20X1 and 20X2.

Ml marks

Summarized Balance Sheet

20X1

000

9.990

20X2

'000

25,400

Fixed Assets

Current Assets

Stocks

Debtors

Cash

80.290

80.420

24.184

184,894

100.910

86,740

11,580

199.230

Current Liabilities

Trade creditors

Taxation

Proposed dividend

Net Current Assets

65.208

4,946

3,570

73.724

111.170

74.460

6,520

3.970

84,950

114.280

Total assets less current liabilities

120.160

139.680

Long term Debts

10% Debentures 2004/2005

Capital and reserves

Called up share capital of 25p/ share

Profit and loss account

Shareholders fund

Summarized Profit and Loss Account

Turnover

Operating profit