Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

Calculate the Altman Z - score of a firm who has the following financials: Working capital = $ 1 , 0 0 0 Retained earnings

Calculate the Altman Z-score of a firm who has the following financials:
Working capital =$1,000
Retained earnings =$10,000
Earnings before interest and tax =$3,000
Market value of equity =$30,000
Total liabilities =$30,000
Sales =$5,000
Total Assets =$60,000
Altman Z-Score =1.2A+1.4B+3.3C+0.6D+1.0E
Where:
A= working capital / total assets
B= retained earnings / total assets
C= earnings before interest and tax / total assets
D= market value of equity / total liabilities
E= sales ?? total assets
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions