Mr. Lim is a credit analyst at the Commerce Bank. Recently, he received a credit application from MegaMaju Berhad, a public listed company that specialized in the manufacturing of microchip components. The company decided to apply for funds that amounted RM3.5 million. In the initial loan application stage, Mr. Lim has to assess an abbreviated portion of the financial information which is shown below:

BALANCE SHEET of MegaMaju Bhd as at end of 2021 (in RM million)
Current Asset	47,500	Current Liabilities	42,600
Long Term Asset	57,500	Long Term Liabilities	??
		Shareholders Equity
		Paid in capital	34,000
		Retained Earnings	??
Total Asset	105,000	Total Liabilities & Equity	105,000

INCOME STATEMENT OF MEGAMAJU BHD AS AT END OF 2021 (in RM million)
Sales	107,000
Cost of Goods sold	(52,400)
Depreciation	(46,200)
EBIT	8,400
Interest	(10)
Tax	(2,490)
Net Income	5,900
Dividend	4580
Addition to Retained earnings	1320

The stock price of MegaMaju is RM36 per share and there are 6,500 shares outstanding. The company recorded retained earnings of RM16,980 million in the previous year. Since the company is a publicly listed company, the following Z-score model is adopted.

Z-score = 3.3(EBIT/Total assets) + 1.2(NWC/Total assets) + 1.0(Sales/Total assets)

+ .6(Market value of equity/Book value of debt)

+ 1.4(Accumulated retained earnings/Total assets)

A. Calculate the Z-score for the company and determine its financial standing for this company. Assume Z-scores 2 .99 indicate non-bankruptcy; Z 1.81 indicates predicted bankruptcy and Z-scores of between 1.91 and 2.99 indicate a grey area.

(10 Marks)

B. If you are the financial manager of MegaMaju, with the company's current financial situation, what would you do to better improve the company's financial situation?