Altman's Z-score model is Z = 1.2X₁ + 1.4X₂ + 3.3X₃ + 0.6X₄ + 1.0X₅ X₁ = Working Capital/Total Assets
X₂ = Retained Earnings/Total Assets
X₃ = EBIT/Total Assets
X₄ = Market Value Equity/Book Value Long-Term Debt
X₅ = Sales/Total Assets
Using the Altman's Z model,Big Valley's Z-score is

Question

Quizplus · Accepted Answer

Altman's Z-score = 1.2(Working Capital/Total Assets) + 1.4(Retained Earnings/Total Assets) + 3.3(EBIT/Total Assets) + 0.6(Market Value Equity/Book Value Long-Term Debt) + 1.0(Sales/Total Assets)= 1.2(0.1) + 1.4(0.2) + 3.3(0.3) + 0.6(0.4) + 1.0(0.5)= 0.12 + 0.28 + 0.99 + 0.24 + 0.5= 3.22

Altman's Z-Score Model Is Z = 1