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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 Zscore can be used
to predict with accuracy the risk of a business going bankrupt within a year, and with
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 Zscore, and then give your recommendation.
The following ratios are completed for Matimba Transport Pty Ltd for FY :
o working capital to total assets ratio X
o retained earnings to total assets ratio X
o profit before interest and tax to total assets X
o market value of equity to book value of debt X
o sales to total assets X
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