Question
Compute and Interpret Altman's Z-scores Following is selected financial information for eBay Inc., for its fiscal years 2016 and 2015. (In millions, except per share
Compute and Interpret Altman's Z-scores
Following is selected financial information for eBay Inc., for its fiscal years 2016 and 2015.
(In millions, except per share data) | 2016 | 2015 |
---|---|---|
Current assets | $ 8,875 | $ 7,904 |
Current liabilities | 3,847 | 2,263 |
Total assets | 23,847 | 17,755 |
Total liabilities | 13,308 | 11,179 |
Shares outstanding | 530 | 741 |
Retained earnings | 14,959 | 7,713 |
Stock price per share | 29.69 | 27.48 |
Sales | 8,979 | 8,592 |
Earnings before interest and taxes | 2,325 | 2,197 |
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 best describes the company's likelihood to go bankrupt given the z-score in 2015 compared to 2016.
The z-score in 2016 decreased slightly. Z-scores for both years are in the gray area indicating some risk of bankruptcy.
The z-score in 2016 increased slightly, which suggests the company's risk of bankruptcy has increased.
The z-score in 2016 increased slightly. Z-scores for both years are in the gray area indicating some risk for bankruptcy
The z-score in 2016 decreased slightly, which suggests the company's risk of bankruptcy has decreased.
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