Hi,

I am valuing a company through use of FCFF and FCFE and I am unable to reconcile. Reference first tab on spreadsheet FCFF

In addition the company has a negative sustainable growth rate. What does that mean? Reference tab on spreadsheet SGR

DorsaVi Forecasts DorsaVi Financial Statement Model Sales Growth 30% Current Assets/Sales 449% Current Liabilities/Sales 85% Net Fixed Assets/Sales 38% Costs of Goods Sold/Sales 654% Depreciation Rate 10% Interest Rate on Debt 8% Interest Paid on Cash 3% Tax Rate 30% Dividend Payout Rate 5% Actuals FY 2014 FY 2015 $ $ Current Assets CA -Cash CA - Receivables CA- Inventories CA- Prepayments Total Current Assets 13,938,445 712,698 189,783 41,812 14,882,738 5,743,513 1,058,975 137,956 227,522 7,167,966 Non Current Assets NCA- PP&E NCA - Patents (Intangible) NCA- accumulated amortisation NCA-Goodwill Total Non Current Assets 198,237 285,287 (27,643) 0 455,881 324,700 457,842 (45,288) 112,110 849,364 Total Assets 15,338,619 8,017,330 494,251 0 211,040 705,291 1,066,532 38,252 255,111 1,359,895 Provisions Total Non Current Liabilities 13,666 13,666 40,719 40,719 Total Liabilities 718,957 1,400,614 NET ASSETS 14,619,662 6,616,716 Owners Equity Contributed Equity (SHARE CAPITAL) 23,835,099 23,855,099 Reserves Retained Earnings TOTAL EQUITY 83,889 (9,299,326) 14,619,662 78,697 (17,317,080) 6,616,716 Sales Revenue 529,281 1,358,218 Grant Income Foreign Exchange Gain 10,879 118,755 119,219 Total Revenue excluding interest 540,160 1,596,192 Forecasts FY 2016 FY 2017 Statement of Position 126,463 Current Liabilities NCL - Account Payable NCL - Finance Liability (debt) NCL - Provisions Total Current Liabilities Non Current Liabilities (8,002,946) Statement of Performance (P&L) 156.62% Less Cost of Goods Sold (42,004) Less Operating Costs (Expenses) (Excluding Finance Expense & Dep/ Amort) (4,803,841) EBITDA (4,305,685) Depreciation -31000 Amortisation -11325 EBIT Interest Revenue Interest Expense (4,348,010) 227258 -1341 (114,177) (10,332,161) (8,850,146) -69943 -17645 (8,937,734) 254224 -1199 Growth in Sales in one year 0 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Profit Before Tax (PBT) 225917 (4,122,093) 253025 (8,684,709) Income Tax Benefit 559,583 648,548 Net Interest Revenue/ Expense Loss from continuting operations (NPAT)Reported NPAT (3,562,510) Total Comprehensive Loss (3,562,510) (8,036,161) -326570 (8,362,731) Tax Rate 30% 30% -3178549 -234776 17077979 13664654 -7889988 -363196 58252 -8194932 (4,348,010) 42325 (8,937,734) 87588 277,831 126,463 -9,254,440.0 177,118 37,053 -9,468,610.5 Exchange differences Corporate Tax rate from financial statement Statement of Cash Flows Cash From Operations Cash from investments Cash From Financing Change in Cash Free Cash Flow EBIT after tax Depreciation/ Amortisation Change in Net working Capital Capex FCFF Interest expense after tax Debt Change FCFE 8 mil loss 8 mil cash reduction (17,317,080.00) retained earnings (17,317,080.00) retained earnings Reconciliation Dividends Change in Equity FCFE distributed 0 (9,468,611) (9,468,611) do not include retained earnings. Only issued equity (17,317,080.00) (7,848,470) Dupont Analysis - DorsaVi Actuals FY 2014 FY 2015 NPAT Equity ROE NPAT Total Assets ROA Total Assets Equity Leverage 2014 -3,562,023 14,619,662 -24.36% -3,562,023 15,338,619 -23.22% 15,338,619 14,619,662 1.05 2015 -8,036,161 6,616,716 -121.45% -8,036,161 8,017,330 -100.23% 8,017,330 6,616,716 1.21 Dupont Calc ROE -24.36% -121.45% NPAT Sales Profit Margin Sales Total Assets Asset Turnover -3,562,023 529,281 -672.99% 529,281 15,338,619 0.03 -8,036,161 1,358,218 -591.67% 1,358,218 8,017,330 0.17 Retained Earnings Equity % Current Assets Non Current Assets % -9,299,326 14,619,662 -63.61% 14,882,738 455,881 3264.61% -17,317,080 6,616,716 -261.72% 7,167,966 849,364 843.92% Dupont Analysis - DorsaVi ROE ROA Leverage Profit Margin Asset Turnover Retained Earnings/Total Equity Current v Non Current Ratio FY 2024 FY 2025 DorsaVi Financial Statement Model Sales Growth Current Assets/Sales Current Liabilities/Sales Net Fixed Assets/Sales Costs of Goods Sold/Sales Depreciation Rate Interest Rate on Debt Interest Paid on Cash Tax Rate Dividend Payout Rate 30% 449% 85% 38% 654% 10% 8% 3% 30% 5% Year Profit and Loss 2015 2016 Fcst Sales Cost Interest on Debt Interest Earned Depreciation Profit before tax Taxes Profit after Tax Dividend Retained Earnings 1596192 10446338 1199 254224 87588 -8684709 648548 -8036161 0 -17317080 2075049.6 -13570824.384 0 -56876.4691504 -73810.7288421 -11626461.982 3487938.5946 -8138523.38739 406926.16937 -7731597.21803 Balance Sheet Cash Current assets Fixed assets At cost Depreciation Net fixed assets Total assets Current liabilities Debt Stock Accumulated retained earnings Total liabilities and equity 5743513 -9535277.61003 7167966 9316972.704 849364 626850.576842 235479 161668.271158 613885 788518.848 8017330 570213.941975 1359895 1763792.16 0 0 23855099 23855099 -17317080 -25048677.218 6616716 570213.941975 DorsaVi Income Statement (ASX:DVL) 2014 Fiscal Year to 30-June $ Sales Revenue Interest Income Grant Income Foreign Exchange Gain 2015 $ 529,281 227,258 10,879 1,358,218 254,224 118,755 119,219 767,418 1,850,416 3,969 (42,004) (208,254) (135,254) (591,757) (41,838) (227,442) (178,658) (2,334,386) (1,341) (63,982) (43,455) (359,814) (71,360) (23,629) (284,449) (285,370) 4,212 (114,177) (682,492) (331,446) (781,798) (87,588) (78,727) (231,632) (5,029,132) (1,199) (166,303) (7,441) (459,635) (506,052) (248,036) (932,546) (881,133) TOTAL EXPENSES (4,889,024) (10,535,125) PROFIT BEFORE TAX (4,121,606) (8,684,709) 559,583 648,548 (3,562,023) (8,036,161) 0 -326570 (3,562,023) (8,362,731) (3.64) (3.64) (6.60) (6.60) 0.00 0.00 TOTAL INCOME Revenue - Interest income 2014 2015 540,160 1,596,192 LESS EXPENSES Changes in inventories Cost of sales Advertising expense Conference expense Consulting expense Depreciation and amortisation expense Device development expenditure Directors fees Employee benefits expense Finance Costs Occupancy Expense Pilot study expense Professional fees Regulatory expenses Software expenses Travel Expenses Other Expenses Income Tax Benefit PROFIT AFTER TAX (Loss from Continuing Operations)- Reported NPAT Exchange differences on translation of foreign subsidiaries net of tax TOTAL COMPREHENSIVE LOSS Earnings Per Share (Cents) Basic Earnings Per Share (Loss per share) in cents Diluted Earnings Per Share (loss) cents Dividends Per Share (Cents) Operating Costs less Depreciation and Amortisation Expense 2014 2015 (4,847,186) (10,447,537) DorsaVi Investments Balance Sheet (FINANCIAL POSITION) 2014 2015 $ $ Cash and Cash Equivalents Trade and Other Receivables Inventories Other Financial Instruments Income Tax Receivable Other Current Assets (Prepayments) 13,938,445 712,698 189,783 0 0 41,812 5,743,513 1,058,975 137,956 0 0 227,522 Total Current Assets 14,882,738 7,167,966 Trade and Other Receivables Available for Sale Financial Assets Property, plant and equipment Intangible Assets Deferred Tax Assets Investments in Associates Derivative Financial Instruments Other Financial Instruments 0 0 198,237 257,644 0 0 0 0 0 0 324,700 524,664 0 0 0 0 Total Non Current Assets 455,881 Total Assets Current Assets Non Current Assets 2014 CA 902,481 CL 494,251 2015 CA 1,196,931 CL 1,066,532 849,364 CA-CL 408,230 CA-CL 130,399 15,338,619 8,017,330 CA-CL (277,831) Trade and other Payables Interest Bearing Loans and Borrowings Other Financial Instruments Income Tax Payable Provisions Other Current Liabilities 494,251 0 0 0 211,040 0 1,066,532 38,252 0 0 255,111 0 Total Current Liabilities 705,291 1,359,895 Interest Bearing Liabilities Deferred Tax Liabilities Provisions Other Financial Instruments Other 0 0 13,666 0 0 0 0 40,719 0 0 Total Non Current Liabilities 13,666 40,719 Total Liabilities 718,957 1,400,614 NET ASSETS 14,619,662 6,616,716 Contributed Equity (SHARE CAPITAL) Reserves Retained Earnings 23,835,099 83,889 (9,299,326) 23,855,099 78,697 (17,317,080) TOTAL EQUITY 14,619,662 6,616,716 Retained Earnings to Total Equity Ratio -63.61% -261.72% Current Liabilities Non Current Liabilities Owners Equity Net borrowing (864,229) DorsaVi Investments Cash Flow Statement Fiscal Year to 30-June 2014 2015 $ $ Cash Flows from Operating Activities Receipts from Customers 695,690 Payments to Suppliers and Employees (inclusive (4,619,695) of GST) Grants received 10,879 Interest Received 220,245 Borrowing Costs Paid- \\financing costs 0 Income Taxes refunded 514,332 1,146,188 (9,967,539) Net Cash Flows from Operating Activites (7,889,988) (3,178,549) 118,755 254,224 (1,199) 559,583 Cash Flows from Investing Activities 38252 37,053 Payment for Property Plant and Equipment and Leasehold Payment for business acquisition Payment for Intangibles (108,262) (70,641) 0 (126,514) (120,000) (172,555) Net Cash Flows from Investing Activities (234,776) (363,196) 16,500,000 2,000,000 (1,416,417) (5,604) 0 0 20,000 0 0 0 63,813 (25,561) 37,053 Cash Flows from Financing Activities Proceeds from share issue Proceeds from convertible note issue Cost of raising capital net loans to related parties Proceeds from finance Repayments of finance Net Cash Flows from Financing Activitis 17,077,979 58,252 Cash at beginning of the financial year Net (decrease)/ increase in cash held 273791 13,664,654 13938445 (8,194,932) Cash and Cash Equivalents at End of Year 13,938,445 5,743,513 16,480,000 18,480,000 A Closer look at Profit Margin DorsaVi 2014 COGS/ Sales -7.94% Gross Profit/ Sales -778.72% Other Exp/ Sales -53.92% Employee Exp/ Sales -441.05% Depreciation, Impairment, -7.90% Amort/ Sales Operating Lease Rental Exp/ Sales -12.09% A Closer look at Operating Efficiency Sales/ Receivables 0.74 Sales/ Current Assets 0.04 CA/ CL 14177447.00 Sales/ Non-current Assets 1.16 Sales/ Intangibles 2.05 Sales/ PPE 2.67 Sales/ Inventory 2.79 2015 -8.41% -775.66% -64.87% -370.27% -6.45% Using Sales Revenue -12.24% 1.28 0.19 5808071.00 1.60 2.59 4.18 9.85 A Closer look at Financial Risk Interest Bearing L/ Assets 0.00% Interest Coverage (EBIT/ Int 3073.53 Exp) 0.48% 7243.29 Cash Cover 8.39 8.72 Creative Ratios Sales/ Employee Sales/ Store unknown unknown 145.94 139.53 Strange 6000 employees employee number estimated by MYR in the fin statemen atement Profit Margin Profit Margin NPAT Sales DorsaVi 2014 -3,562,023 529,281 -672.99% 2015 -8,036,161 1,358,218 -591.67% Using Reported NPAT -540.00% 2014 -560.00% Using Sales Revenue -580.00% Profit Margin 2015 -600.00% DorsaVi -620.00% -640.00% ROE ROE NPAT Equity DorsaVi 2014 -3,562,023 14,619,662 -24.36% 2015 -8,036,161 6,616,716 -121.45% -660.00% -680.00% 0.00% 2014 -20.00% 2015 ROE -40.00% ROA -60.00% DorsaVi -80.00% ROA NPAT Total Assets DorsaVi 2014 -3,562,023 15,338,619 -23.22% 2015 -8,036,161 8,017,330 -100.23% -100.00% -120.00% -140.00% 0.00% 2014 2015 ROA -20.00% -40.00% -60.00% -80.00% -100.00% -120.00% DorsaVi Dupont Analysis - DorsaVi ROE NPAT Equity ROE ROA NPAT Total Assets ROA Leverage Total Assets Equity Leverage Dupont Calc ROE 2014 -3,562,023 14,619,662 -24.36% -3,562,023 15,338,619 -23.22% 15,338,619 14,619,662 1.05 2015 -8,036,161 6,616,716 -121.45% -8,036,161 8,017,330 -100.23% 8,017,330 6,616,716 1.21 -24.36% -121.45% Using reported NPAT % Change 2014 Profit Margin, ROE & ROA graphs are in Profitability tab. 125.61% -54.74% Asset 398.48% Turnover 125.61% Rat io 0.18 -47.73% 0.16 331.63% -47.73% 0.14 -54.74% 0.12 15.49% DorsaVi 0.10 398.48% DorsaVi Assets are funded by equity almost same assets to equity. 0.08 Profit Margin Asset Turnover Retained Earnings/Total Equity Current v Non Current Ratio NPAT Sales Profit Margin Sales Total Assets Asset Turnover -3,562,023 529,281 -672.99% 529,281 15,338,619 0.03 -8,036,161 1,358,218 -591.67% 1,358,218 8,017,330 0.17 Retained Earnings Equity % Current Assets Non Current Assets % -9,299,326 14,619,662 -63.61% 14,882,738 455,881 3264.61% -17,317,080 6,616,716 -261.72% 7,167,966 849,364 843.92% Using sales revenue 125.61% 156.62% -12.08% 156.62% -47.73% 390.95% 86.22% -54.74% 311.45% -51.84% 86.31% -74.15% 0.06 0.04 0.02 0.00 2014 2015 DorsaVi 1.30 1.20 1.10 1.00 0.90 2014 Leverage Rat io DorsaVi 2015 Current Ratio 2014 14,882,738 705,291 21.10 Current Assets Current Liabilities DorsaVi DorsaVi 2015 7,167,966 1,359,895 5.27 30.00 20.00 10.00 0.00 2014 DorsaVi 2015 Net Working Capital Current Assets Current Liabilities DorsaVi 2014 14,882,738 705,291 14,177,447 DorsaVi 2015 7,167,966 1,359,895 5,808,071 Current Rat io Net Working Capit al 15,000,000 DorsaVi 10,000,000 5,000,000 0 2014 Funding Gap (Cash Conversion Cycle) DorsaVi 2014 2015 Days Inventory 71.75 74.72 Days Receivables 3.20 2.99 Days Payable 56.18 51.85 Funding Gap 18.78 25.86 2015 DorsaVi Funding Gap 30.00 DorsaVi 20.00 10.00 0.00 2014 2015 Cash Cover / Interest Cover Debt to Equity DorsaVi 2014 2015 Total Liabilities 718,957 1,400,614 Equity 14,619,662 6,616,716 DorsaVi 0.05 0.21 Debt to Equity Ratio > 2 - risky DorsaVi 2014 2015 Total Assets 15,338,619 8,017,330 Equity 14,619,662 6,616,716 DorsaVi 1.05 1.21 DorsaVi -94.81% 54.74% -330.44% 0.25 0.20 0.15 DorsaVi 0.10 finance borrowingleverage to increase returns 0.05 0.00 1 Debt to Assets DorsaVi Total Liabilities Total Assets DorsaVi 2014 718,957 15,338,619 0.05 2015 1,400,614 8,017,330 0.17 17% -94.81% 47.73% -272.71% Interest Bearing Short Term and Long Term Debt to Total Assets DorsaVi 2014 2015 Interest Bearing 0 38,252 Liabilities Total Assets DorsaVi 15,338,619 0.000 8,017,330 0.005 Debt t o Equit y .5% of assets are funded through debt. 99.5% of assets are funded through equity 2 DorsaVi Debt t o Asset s 0.20 0.15 0.10 0.05 0.00 DorsaVi 1 2 DorsaVi 0.006 Int erest Bearing Short Term & Long Term Debt t o Asset s 0.005 0.004 DorsaVi 0.003 0.002 0.001 Interest Bearing Short Term and Long Term Debt to Equity DorsaVi 2014 2015 Interest Bearing 0 38,252 Liabilities Total Equity DorsaVi 14,619,662 0.00 6,616,716 0.01 Short Term Debt to Assets DorsaVi 2014 Short Term Debt 705,291 Total Assets 15,338,619 DorsaVi 0.05 2015 1,359,895 8,017,330 0.170 0.000 1 2 DorsaVi 0.01 0.01 0.01 0.00 0.00 0.00 0.00 0.00 2014 DorsaVi 2015 DorsaVi 0.20 0.15 0.10 0.05 0.00 Int erest Bearing Short Term & Long Term Debt t o Equit y Short Term Debt t o Asset s DorsaVi Long Term Debt to Assets DorsaVi 2014 Long Term Debt 0 Total Assets 15,338,619 DorsaVi 0.00 0.00 1 2015 0 8,017,330 0.00 Quick (Acid Test) Ratio DorsaVi 2014 Current Assets Less 14,692,955 Inventory 705,291 20.83 2014 14,692,955 1.00 0.80 0.60 0.40 0.20 0.00 1,359,895 5.17 2015 7,030,010 DorsaVi Current Assets Less Inventory Current Liabilities Myer Holdings Long Term Debt to Asset s DorsaVi 2015 7,030,010 Current Liabilities DorsaVi 2 DorsaVi 1 2 DorsaVi Quick (Acid Test ) Rat io 25.00 20.00 15.00 705,291 20.83 1,359,895 5.17 DorsaVi 10.00 5.00 Cash Flows from Operations Ratio DorsaVi 2014 Operating Cashflow -3,178,549 Current Liabilities 705,291 DorsaVi -4.51 0.00 2014 2015 -7,889,988 1,359,895 -5.80 2015 DorsaVi 0.00 -2.00 -4.00 -6.00 Times Interest Earned Ratio (Interest Coverage Ratio) = EBIT/Interest Expense -8.00 DorsaVi 2014 2015 2014 EBIT Interest Expense DorsaVi -4,348,010 227,258 -19.13 -8,937,734 254,224 -35.16 -105.56% -11.87% -83.76% DorsaVi 2015 DorsaVi 0.00 2014 -5.00 -10.00 -15.00 -20.00 -25.00 -30.00 -35.00 -40.00 Cash Flows From Operat ions T imes Int erest Earned Rat io 2015 DorsaVi Current Assets Vertical Analysis DorsaVi : Current Assets Vertical Analysis DorsaVi 2013 Other Financial Assets/ Assets 4,983 Other Financial Assets/ Assets % 1% Inventories 71,739 Inventories % 18% Cash & Cash Equivalents 316,644 Cash & Cash Equivalents % 78% Trade & Income Tax/ Other Receivable 13,350 Trade & Income Tax/ Other Receivabl 3% Total Current Assets 406,716 2014 3,140 1% 73,399 19% 307,808 78% 9,895 3% 394,242 2015 21,442 5% 71,092 18% 294,168 74% 10,028 3% 396,730 3% 3% 3% 78% 78% 74% 18% 1% 2013 19% 1% 2014 Trade & Income T ax/ Other Receivables % Other Financial Assets/ Assets % 18% 5% 2015 Cash & Cash Equivalents % Inventories % Current Assets Cash and Cash Equivalents Trade and Other Receivable Inventories Other Financial Instruments Other Current Assets Total Current Assets 2014 313,308 12,155 98,496 1,517 5,215 430,691 2015 313,157 6,858 83,959 13,625 4,676 422,275 Current Assets Vertical Analysis 100% 80% 60% 40% 20% 0% 1 DorsaVi Current Assets Current Assets Non Current Assets Non Current Assets Total Assets Total Assets Current Liabilities Current Liabilities Non Current Liabilities Non Current Liabilities Total Liabilities Total Liabilities Total Equity Total Equity 2014 14,882,738 455,881 15,338,619 705,291 13,666 718,957 14,619,662 2015 7,167,966 -51.84% 849,364 86.31% 8,017,330 -47.73% 1,359,895 92.81% 40,719 197.96% 1,400,614 94.81% 6,616,716 -54.74% DorsaVi Horizonal Trend Analysis 250.00% 200.00% 150.00% 100.00% 50.00% 0.00% -50.00% -100.00% 2015 Curre nt Asse ts Non Curre nt Asse ts Total Asse ts Non Curre nt Liabilitie s Total Liabilitie s Total Equity DorsaVi DorsaVi Operating Revenue DorsaVi 2013 767,418 2014 1,850,416 141.12% Curre nt Liabilitie s Operat ing Revenue 160.00% 140.00% 120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% 2014 DorsaVi DorsaVi (DVL) Working Capital Management Current Assets Current Liabilities Inventory Cost of Goods Sold Accounts Receivables Sales Accounts Payable FY14 $ $ $ $ $ $ $ Net Working Capital Net Working Capital = Current Assets - Current Liabilities 14,882,738 705,291 189,783 42,004 712,698 529,281 494,251 FY15 $ $ $ $ $ $ $ $ Current Ratio Current Ratio = Current Assets/Current Liabilities 5,808,071 523.86 238.05 2494.75 Cash Conversion Cycle = Days in Inv + Days in Rec - Days in Pay 4,410,140.80 413,037.20 65,547.80 31,236.20 354,334.60 377,499.80 312,156.60 5.271 Cash Conversion Cycle Days in Inventory = Avg Inventory/(COGS/365) Days in Receivables = Avg Receivables/(Sales/365) Days in Payables = Avg Payables/(COGS/365) 7,167,966 1,359,895 137,956 114,177 1,058,975 1,358,218 1,066,532 Average $ $ $ $ $ $ $ -1732.84 Average Inventory Average Receivables Average Payables $ $ $ Fundind deficit as a result of days in payable 163,870 885,837 780,392 Share Price Movements DorsaVi NPAT Ordinary Shares Issued Dividends cents Market Share Price (Final Share Price in scents) 2014 -3,562,023 16,500,000 0.00 0.458 2015 -8,036,161 20,000 0.00 0.269 0.00 2014 -2.00 -73% Earnings Per Share DorsaVi Using reported NPAT DorsaVi 2015 -4.00 -6.00 -8.00 Earnings Per Share (Basic) DorsaVi 2014 -3.64 2015 -6.60 DorsaVi Using adjusted diluted EPS cents Price Earnings (P/E) Ratio (Market Price Per Share / Earnings Per Share) 2014 2015 DorsaVi -0.13 -0.04 0.00 2014 -0.02 Price Earnings Ratio 2015 -0.04 DorsaVi -0.06 -0.08 -0.10 Dividend Yield (Dividends Per Share/Market Price Per Share) 2014 2015 DorsaVi 0.00% 0.00% -0.12 -0.14 DorsaVi Dividend Yield 100.00% 90.00% 80.00% 70.00% 60.00% DorsaVi 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 2014 2015 DorsaVi Revenue Profit (NPAT) Total Equity Total Assets Dividends ROA Retention Ratio Leverage Profit/Assets 1-(Dividends/NPAT) Equity/Assets ROA x Retention RatIo Leverage - (ROA x Retention Ratio) SGR Actual Sales Growth 2014 529,281 (3,562,023) 14,619,662 15,338,619 2015 1,358,218 (8,036,161) 6,616,716 8,017,330 - -23.2% 1.00 0.95 -0.23 1.19 -100.2% 1.00 0.83 -1.00 1.83 -19.59% -54.84% 156.62% Equity/ Assets = Leverage Payout Ratio = Yearly Dividend per share/ Earnings per share Retention rate = 1- (dividends/NPAT) Sales only Using Reported NPAT 2015 DorsaVi Limited Net Working Capital $ Total Assets $ Retained Earnings -$ EBIT -$ Market Value of Equity $ Total Liabilities $ Sales $ 5,808,071.00 8,017,330.00 17,317,080.00 8,937,734.00 6,616,716.00 1,400,614.00 1,358,218.00 A B C D E Net Working Capital/Total Assets Retained Earnings/Total Assets EBIT/Total Assets Market Value of Equity/Total Liabil Sales/Total Assets Altman Z Score Ratio 0.7 -2.2 -1.1 4.7 0.2 Coefficient 1.2 1.4 3.3 0.6 1 Result 0.86933 (3.02394) (3.67885) 2.83449 0.16941 -2.83 -2.8295543327 above 3.0 not likely to go bankrupt Here is the formula (for manufacturing firms), which is built out of the five weighted financial ratios: 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 & Tax/Total Assets D = Market Value of Equity/Total Liabilities E = Sales/Total Assets Read more: How To Calculate A Z-Score | Investopedia http://www.investopedia.com/articles/fundamental/04/021104.asp#ixzz49N5Y7Xpt Follow us: Investopedia on Facebook