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

Working capital/total assets ratio (X₁) = 0.75

Retained earnings/total assets ratio (X₂) = 0.10

Earnings before interest and taxes/total assets ratio (X₃) = 0.05

Market value of equity/book value of long-term debt ratio (X₄) = 0.10

Sales/total assets ratio (X₅) = 0.65

Calculate the Altman's Z-score for the borrower in question. How is this number a sign of the borrower's default risk?