3. (Ten points) The Altman Z Score in been determined to be a reasonably accurate predictor of pending bankruptcy. For example, over the last 40 years the Score has proven to accurately predict bankruptcy (two years in advance) more than 80% of the time. In March 2017, HH Gregg an electronics retailer, filed for bankruptcy protection. Below is selected data for Gregg as of 3/31/15; two years prior to the bankruptcy filing. Calculate Greggs Z score as of 3/31/15? All amounts are in thousands (meaning CA would have been $328,393,000) except for share price.

Current Assets - $328,393

Current Liabilities - $214,097

Total Assets - $467,629

Total Liabilities - $294,041

Retained Earnings - $22,132

Earnings (Loss) Before Interest/Taxes - $(99,448)

Shares outstanding 28,130

Share price - $6.29

Total Sales - $2,129,374

1. .45
2. .99
3. 2.04
4. 3.76
5. 4.54

4. Based on your calculations above, did you validate the Z Score as a reasonably accurate predictor of bankruptcy.

1. Yes; the score was solidly in the distress zone
2. Yes; the score was just on the downward edge of the Grey Zone
3. No; the Z score was much higher than I thought it would be
4. No: the score was right in the middle of the Grey Zone.