The following data are for the A, B, and C Companies: Company Variables A B C Current assets $150,000 $170,000 $180,000 Current liabilities $60,000 $50,000 $30,000 Total assets $300,000 $280,000 $250,000 Retained earnings $80,000 $90,000 $60,000 Earnings before interest and taxes $70,000 $60,000 $50,000 Market price per share $20.00 $18.75 $16.50 Number of shares outstanding 9,000 9,000 9,000 Book value of total debt $30,000 $50,000 $80,000 Net Sales $430,000 $400,000 $200,000 Required: Compute the Altman-Z score for company C and comment on the bankruptcy risk of the company.

• A.

  Altman-Z score is 1.6 and there is bankruptcy risk.

• B.

  Altman-Z score is 3.6 and there isn't any bankruptcy risk.

• C.

  Altman-Z score is 5.1 and there isn't any bankruptcy risk.

• D.

  Altman-Z score is 1.5 and there isn't any bankruptcy risk.

• E. Altman-Z score is 0.36 and there is bankruptcy risk.