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The CEO of Sizwe Aviation Services approached your bank for a credit facility. The following are ratios for Sizwe Aviation Services for the 2016 financial

The CEO of Sizwe Aviation Services approached your bank for a credit facility. The following are ratios for Sizwe Aviation Services for the 2016 financial year.

• Working capital to total asset ratio = 12%
• Retained earnings to total asset ratio = 25%
• Profit before interest and tax to total assets = 17%
• Market value of equity to book value of debt = 110%
• Sales to total assets = 120%

Based on the Altman’s Z-score, calculate the risk of bankruptcy for Sizwe Aviation Services. Briefly comment on the credit decision you make based on the calculated Z-score.

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