Question
Bankruptcy Risk and Z-Score Analysis Following are selected ratios for JetBlue Airways for two recent fiscal years. Ratio 2010 2009 Current ratio 1.253 1.326 Working
Bankruptcy Risk and Z-Score Analysis Following are selected ratios for JetBlue Airways for two recent fiscal years.
Ratio | 2010 | 2009 |
---|---|---|
Current ratio | 1.253 | 1.326 |
Working capital to total assets | 0.042 | 0.058 |
Retained earnings to total assets | 0.033 | 0.019 |
EBIT to total assets | 0.050 | 0.040 |
Market value of equity to total liabilities | 0.390 | 0.320 |
Sales to total assets | 0.573 | 0.503 |
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.) 2010 z-score = Answer
2009 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 very high 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 above 3.00 which indicate the company has a very low probability of bankruptcy.
Both Altman z-scores are below 1.80 which indicate the company has a very high probability of bankruptcy.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started