In Altman's Z-score model, which of the following variables has a negative coefficient in the discriminant function that comes out of the model? (A negative coefficient would mean that the Z-score is decreasing in the variables.)
A) Working Capital/Total Assets
B) Market Value of Equity/Book Value of Debt
C) Sales/Total Assets
D) None of the above.

Question

Quizplus · Accepted Answer

All the variables listed in options A, B, and C have positive coefficients in Altman's Z-score model, meaning they contribute positively to the Z-score calculation. A negative coefficient would decrease the Z-score, but none of these variables do that.

In Altman's Z-Score Model, Which of the Following Variables Has