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Consider a Firm with the Following Financial Ratios

Question 90

Essay

Consider a firm with the following financial ratios:
EBIT/total assets = .12
Sales/total assets = 1.4
Market equity/book debt = .9
Retained earnings/total assets = .4
Working capital/total assets = .12
What is the firm Z scorer?

Correct Answer:

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(3.3 × .12) + (1.0 × 1.4) + (.6 × .9) + ...

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