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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
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
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Step: 1
Calculating the Altman ZScore First well use the given financial data to calculate each component individually using the Altman ZScore formula Z 12Working CapitalTotal Assets 14Retained EarningsTotal ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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