Tillman Company Ltd has applied for a loan from the National Trust Bank in order to invest in several potential opportunities. In order to evaluate the firm as a potential borrower, the bank would like to compare Tillman Company to the industry. The following are the financial statements given to National Trust Bank. Assume all profits are retained for both periods as no dividend was paid out. Balance Sheet 12/31/2016 12/31/2017 All figures including share are in (00,000) hundred thousand. Cash Accounts receivable Inventory Current assets Plant and equipment Less: accum. deprec. Net plant and equipment Total assets Liabilities and Owners' Equity Accounts payable Notes payable Current liabilities Bonds Total owners' equity Total liabilities and owners equity Income Statement Sales (100% credit) Cost of goods sold Gross profit Operating expenses Depreciation Net operating income (EBIT) Interest expense Net income before taxes Taxes: Net income $225 275 500 1,000 1,700 (320) 1,380 $2,380 $150 225 375 405 1,600 $2,380 $1,100 (600) 500 (20) (160) 320 (64) 256 (56) $200 $270 290 580 1,140 1,860 (520) 1,340 $2,480 $200 0 200 460 1,820 $2.480 $1,330 (725) 605 (25) (200) 380 (87) 293 (73) $220 Notes Authorised shares (common stock) 2,000; Issued and outstanding: 1,400 at $1.00 par value Market price for each share of common stock was as follows: January 2, 2016 - $1.25; December 31, 2016 - $1.30; January 2, 2017- $1.35; December 31, 2017 - $1.50 No dividend was paid in either year, that is, all income was retained in both years. (a) Use Altman Z-Score (for 2 years) to decide whether or not you would lend five million dollars to the above-mentioned company. Show all calculations supporting your conclusion. (18 marks)

Tillman Company Lid has applied for a loan from the National Trust Bank in order to invest in several potential opportunities. In order to evaluate the firm as a potential borrower, the bank would like to compare Tiliman Company to the industry. The following are the financial statements given to National Trust Bank. Assume all profits are retained for both periods as no dividend was paid out. Aolance Sheet All figures including share are in (00,000) hundred thousand. Notes Authorised shares (common stock) 2,000; Issued and outstanding: 1,400 at $1.00 par value Market price for each share of common stock was as follows; January 2, 2016 - \$1.25; December 31, 2016 - \$1.30; January 2, 2017-\$1 35; December 31, 2017 - $1.50 No dividend was paid in either year, that is, all income was retained in both years. (a) Use Altman Z-Score (for 2 years) to decide whether or not you would lend five million dollars to the above-mentioned company. Show all calculations supporting your conclusion