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Suppose that the financial ratios of a potential borrowing firm take the following values: 1. Working capital/total assets ratio (X 1 ) = 0.75 2.

Suppose that the financial ratios of a potential borrowing firm take the following values:

1. Working capital/total assets ratio (X₁) = 0.75 2. Retained earnings/total assets ratio (X₂) = 0.10 3. Earnings before interest and taxes/total assets ratio (X₃) = 0.05 4. Market value of equity/book value of total liabilities ratio (X₄) = 0.10 5. Sales/total assets ratio (X₅) = 1.34

Calculate the Altmans Z score for the borrower in question.

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