Z score Question The following information relates to two companies who belong to same industry. Good Limited ($ 000) Bad Limited ($000), Current Assets 100,000 170,000 Non-Current Assets 600,000 220,000 Current Liabilities 50,000 120,000 Earnings before tax and interest 70,000 72,000 Long Term Debt 800,000 450,000 Share Capital (@$ 1 each) 100,000 50,000 Retained Earnings 100,000 100,000 Sales 300,000 300,000 Tax rate applicable for both the companies is 20% . Interest rates for long term debts are 2% for Good limited and 3% for bad limited. . Market price of share is $ 2 for Good limited and $ 4 per share You are required to analyze the financial position of above stated companies by using Z-score: Where Z-Score is: 1.2(X1) +1.4(X2) +3.3(X3) +0.6(X4) +1.0(X5) X1 working capital/total assets X2 retained earnings/total assets X3 earnings before interest and tax/total assets X4 market value of equity/book value of debt X5 sales/total assets