Compute and Interpret Altman's Z-scores

Following is selected financial information for Netflix, for 2018 and 2017.

In thousands, except per share data	2018	2017
Current assets	$9,694,135	$7,669,974
Current liabilities	6,487,320	5,466,312
Total assets	25,974,400	19,012,742
Total liabilities	20,735,635	15,430,786
Shares outstanding	436,599	433,393
Retained earnings	2,942,359	1,731,117
Stock price per share	267.66	191.96
Sales	15,794,341	11,692,713
Earnings before interest and taxes	1,605,226	838,679

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.) 2018 z-score = Answer 2017 z-score = Answer Which of the following best describes the company's likelihood to go bankrupt given the z-score in 2018 compared to 2017.

The z-score in 2018 increased. Z-scores for both years are in the gray area indicating some risk of bankruptcy.

The z-score in 2018 increased, which suggests the company's risk of bankruptcy has increased.

The z-score in 2018 increased. Z-scores for both years indicate low bankruptcy potential in the short term.

The z-score in 2018 decreased, which suggests the company's risk of bankruptcy has decreased.