Question
Consider the coefficients of Altman's Z-score. Altman Z=1.2 WC TA +1.4 RE TA +3.3 EBIT TA +1.0 Sales TA +0.6 MVE BVLTD Where WC =
Consider the coefficients of Altman's Z-score.
AltmanZ=1.2WCTA+1.4RETA+3.3EBITTA+1.0SalesTA+0.6MVEBVLTD
Where WC = Working Capital, TA = Total Assets, RE = Retained Earnings,
MVE= Market Value of Equity and BVLTD = Book Value of Long-Term Debt.
On May 15, 2020, Tsingpre Airlines has applied for loan from your bank. After calculating Altman Z for Tsingpre Airlines you note that it exceeds the Altman Z threshold and recommend approval of the loan request. Unfortunately, your chief credit manager rejects the loan and suggests that you have omitted one of the 5Cs of credit. Present arguments on why the credit manager has disputed your decision.
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Healthcare Finance An Introduction To Accounting And Financial Management
Authors: Louis C. Gapenski
5th Edition
1567934250, 978-1567934250
