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Bankruptcy Risk and Z-Score Analysis Following are selected ratios for American Airways for two recent fiscal years. Ratio 2005 2006 Current ratio 0.725 0.740 Working

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Bankruptcy Risk and Z-Score Analysis Following are selected ratios for American Airways for two recent fiscal years. Ratio 2005 2006 Current ratio 0.725 0.740 Working capital to total assets (0.088) (0.091) Retained earnings to total assets 10.176) (0.183) EDIT to total assets 0.025 0.064 Market value of equity to total abilities 0.150 0.250 Sales io total asets 0.790 0.870 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 2005 z score 2006 -score Which of the following statements best describes the company's Altman 2-scores? OBoth Altman z-scores are below 180 which indicate the company has a very high probability of bankruptcy, Both Altman 2-scores are above 3.00 which indicate the company has a very high probability of bankruptcy, Both Altman 2-scores are below 180 which indicate the company has a very low probability of bankruptcy. Both Altman scores are above 3.00 which indicate the company has a very low probability of bankruptcy

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