Question
Bankruptcy Risk and Z-Score Analysis Following are selected ratios for JetBlue Airways for two recent fiscal years. Ratio 2016 2015 Current ratio 0.604 0.705 Working
Bankruptcy Risk and Z-Score Analysis Following are selected ratios for JetBlue Airways for two recent fiscal years.
Ratio | 2016 | 2015 |
---|---|---|
Current ratio | 0.604 | 0.705 |
Working capital to total assets | (0.069) | (0.104) |
Retained earnings to total assets | 0.258 | 0.194 |
EBIT to total assets | 0.138 | 0.141 |
EBITDA to total assets | 0.180 | 0.181 |
Market value of equity to total liabilities | 1.380 | 1.342 |
Sales to total assets | 0.699 | 0.742 |
Compute and interpret Altman Z-scores for the company for both years. (Do not round until your final answer; then round your answers to two decimal places.) 2016 z-score = Answer 2015 z-score = Answer Which of the following statements best describes the company's Altman z-scores?
Both Altman z-scores are above 3.00 which indicate the company has a low probability of bankruptcy.
Both Altman z-scores are below 1.80 which indicate the company has a very low probability of bankruptcy.
Both Altman z-scores are between 1.80 and 3.00 which indicate the company has some potential of bankruptcy.
Both Altman z-scores are below 1.80 which indicate the company has a very high probability of bankruptcy.
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