Martin & Sons has $4.2 million in net working capital. The firm has total assets with a book value of $48.6 million and a market value of $53.4 million. They currently carry no debt on their balance sheet, sales are expected to be $45 million next year, and their tax rate is similar to ACME at 40%. Through a mixture of synergistic savings and increased market share this acquisition should add $2 million in net profit per year for the next 10 years. Acme Iron is considering buying the company for $60 million in cash. The acquisition will be recorded using the purchase accounting method. What is the z score? Please provide answer in excel.

Attached is the income statement and balance sheet.

What is the amount of goodwill that Acme will record on its balance sheet as a result of this acquisition?

How do you recommend the firm finance this transaction?

Is there a danger that ACME could damage their finances to the point that bankruptcy is a potential

I have all answers just need help with the Zscore?

Task 1 ACME Iron Expected Return Beta 2.35 Risk-free rate 1.75% Expected market return 6.00% Expected return 11.74% Conclusion: ACME Iron expected return is 11.7% ACME Iron Balance Sheet Assets Current assets: Cash Investments Inventories Accounts receivable Pre-paid expenses Other Total current assets Fixed assets: 2014 2015 change 500,000 600,000 100,000 1,000,000 1,025,000 25,000 110,000,000 117,000,000 7,000,000 11,750,000 12,500,000 750,000 2,500,000 2,600,000 100,000 0 125,750,000 2014 Property and equipment 165,000,000 Leasehold improvements 0 0133,725,000 7,975,000 2015 change 175,000,000 10,000,000 0- Equity and other investments 55,000,000 65,000,000 10,000,000 Less accumulated depreciation 15,000,000 15,500,000 500,000 Total fixed assets 235,000,000 255,500,000 20,500,000 Other assets: 2014 2015 change Goodwill 75,000,000 70,000,000 -5,000,000 Total other assets 75,000,000 70,000,000 -5,000,000 435,750,000 459,225,000 23,475,000 Total assets Liabilities and owner's equity Current liabilities: 2014 2015 change Accounts payable 40,500,000 42,400,000 1,900,000 Accrued wages 85,000,000 90,500,000 5,500,000 Accrued compensation 10,000,000 10,855,000 855,000 Income taxes payable 4,024,000 4,697,000 673,000 current portion of LT debt 5,500,000 10,350,000 4,850,000 Other Total current liabilities Long-term liabilities: 0 145,024,000 2014 0158,802,000 13,778,000 2015 change Long term debt 125,000,000 130,000,000 5,000,000 Total long-term liabilities 125,000,000 130,000,000 5,000,000 Owner's equity: 2014 2015 change Common stock 122,000,000 122,000,000 - Preferred stock 16,725,000 16,725,000 - Accumulated retained earnings 27,001,000 31,698,000 4,697,000 Total owner's equity 165,726,000 170,423,000 4,697,000 Total liabilities and owner's equity 435,750,000 459,225,000 23,475,000 Income Statement ACME Iron Dec-15 Financial Statements in '000s of U.S. Dollars REVENUE Gross Sales Less: Sales Returns & Allowances 250,000 2,500 Net Sales 247,500 COST OF GOODS SOLD Beginning Inventory 7,500 Add: Purchases 4,500 Freight-in - Direct Labor 75,000 Indirect Expenses 15,000 Inventory Available 102,000 Less: Ending Inventory Cost of Goods Sold 102,000 Gross Profit (Loss) 145,500 EXPENSES Advertising Amortization Bad Debts Depreciation Dues and Subscriptions Employee Benefit Programs Insurance Interest Legal & Professional Fees Licenses & Fees 7,500 5,000 500 18,750 2,500 10,350 100 - Miscellaneous 10 Office Expenses 100 Payroll Taxes 5,625 Postage 3 Rent - Repairs & Maintenance 5,000 Supplies 2,000 Telephone Travel Utilities Vehicle Expenses Wages 120 1,750 50,000 450 25,000 Total Expenses 134,758 Net Operating Income 10,742 OTHER INCOME Gain (Loss) on Sale of Assets Interest Income Total Other Income TAXES Net Income (Loss) 1,000 1,000 4,697 7,045 5,340,000 158802000 288,802,000 348,802,000 1.694618684 140,350,000 2.485229783 Name Star Ferro Mahindra Ugine Jindal Stainles Mukand Technocraft Ind Electrosteel St Adhunik Ind Usha Martin Rama Steel Tube Lloyds Steels Vardhman Steels Kamdhenu OCL Iron Bedmutha Ind Tulsyan NEC SAL Steel Shah Alloys Metkore Alloys Varun Ind Ramsarup Ind Last Price Market Cap. Sales Net Profit Total Assets (Rs. cr.) Turnover 112.3 2,495.00 -- 573.95 1,877.66 723.01 23.9 1,356.93 6,847.92 67.55 955.2 2,731.88 1.63 4,582.00 358.85 943.78 765.52 82.09 772.42 22.7 30.56 188.15 357.65 -792.02 10,597.57 3.35 807.09 2,597.69 -326.55 9,574.15 108.25 506.22 410.08 2.27 168.38 13.15 400.74 3,447.47 -404.43 4,145.95 122.3 182.64 216.79 5.09 73.64 1.6 143.79 116.68 0.64 - 75.8 140.65 658.05 5.22 513.25 59.95 140.28 841.19 8.15 196.79 9.95 133.47 367.64 -145.68 1,579.85 25.15 52.89 499.62 -39.93 370.78 24 36.32 845.55 -28.66 889.11 3.1 26.34 338.19 -28.77 85.56 9.05 17.92 261.31 124.38 -138.12 2.2 15.49 45.26 -11.34 168.4 2.05 5.97 168.03 -34.48 1,735.48 1.5 5.26 6.38 -42.33 -422.19