Consider the following data of a prospective borrower. What is this company's Z score (round to two decimals)?

Name: Consider the following data of a prospective borrower. What is this company's Z score (round to two decimals)?
Brand: Quizplus
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Question

Consider the following data of a prospective borrower.   What is this company's Z score (round to two decimals)?

Quizplus · Accepted Answer

The Z-score formula for this company is [1.4 + 1.6 + 0.6 + 1.2 + 1.2]/[0.5] = 8. The Z-score is then 3.88, which indicates that the company is relatively safe from bankruptcy. A Z-score above 3 suggests that the company is financially healthy. Therefore, the best choice is B.

Consider the Following Data of a Prospective Borrower