Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Using the discriminant analysis techniques to predict the bankruptcy, answer the following credit worthiness questions regarding Honda and Toyota. The informations for both corporations are

Using the discriminant analysis techniques to predict the bankruptcy, answer the following credit worthiness questions regarding Honda and Toyota. The informations for both corporations are shown as follows.

Honda (in million )

Toyota (in million )

Current assets

7,877

9,726

Total assets

13,535

13,670

Current liabilities

7,519

6,778

Shareholders equity

4,694

5,622

Book value of shareholders equity

8,788

9,835

Net Revenue

6,168

6,888

Retained earnings

1,364

839

Earnings before interest and taxes

1,731

3,194

Market price per share

0.20

0.40

a. Calculate the market value for both corporations

b. What is the book value of debt for Honda and Toyota?

c. Compute the Z-score for both corporations.

d. Explain why Honda have different Z-score from Toyota

e. Which corporation has the high possibility of going bankrupt? Explain.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Campaign Finance

Authors: Robert E. Mutch

1st Edition

0190274697, 9780190274696

More Books

Students also viewed these Finance questions