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When anyone is planning to acquire, keep or sell shares in a business, the financial health thereof is of the utmost importance. According to Prof

When anyone is planning to acquire, keep or sell shares in a business, the financial health
thereof is of the utmost importance. According to Prof Edward Altman, the Z-score can be used
to predict with 95% accuracy the risk of a business going bankrupt within a year, and with 72%
accuracy, within two years. Banks use similar information to make lending decisions. As a credit
analyst for Saamtrek Bank, use the information below to calculate the bankruptcy risk of
Matimba Transport (Pty) Ltd using Altmans Z-score, and then give your recommendation.
The following ratios are completed for Matimba Transport (Pty) Ltd for FY 2021:
o working capital to total assets ratio =25%- X1
o retained earnings to total assets ratio =30%- X2
o profit before interest and tax to total assets =32%- X3
o market value of equity to book value of debt =135%- X4
o sales to total assets =250%- X5

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