• Use Model 1 in the posted accompanying Excel spreadsheet to predict the probability of financial distress and possibly bankruptcy for ZINGA LINK, assuming ZINGA LINK is a public company.
• To decide whether ZINGA LINK will experience financial distress or not, refer to the proposed cutoff points, which are part of the models presented on page 1 of the spreadsheet. (Also see posted sample spreadsheet)
• Based on the results you obtained, assign a likely Credit Rating, per Standard & Poors or Moodys classification,

ALTMAN'S Z-Score Models for Predicting a Firms' Financial Distress
Model 1 (Original): For publicly-held companies
Z = 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + 1X5		X1 = Net Working Capital/Total Assets
		X2 = Retained Earnings/Total Assets
		X3 = EBIT/Total Assets
		X4 = Market Value of All Assets/Book Value of Total Liabilities
		X5 = Sales/Total Assets
Note: Use "Book Value" as proxy for "Market Value". Example: for X4 you'd use Book Value of All Assets.
Z* = Cutoff point = 2.675
. If Z < 2.675 => Firm can be reasonably be expected to experience severe financial distress, and
possibly bankruptcy, within the next year.
. If Z > 2.675 => No financial distress predicted.
. If Z < 1.81 => Firm can be reasonably be expected to experience severe financial distress, and
possibly bankruptcy, within one year.
. If 1.81 < Z < 2.675 => Financial distress and possible bankruptcy.
. If Z > 2.675 => No financial distress predicted.