3) A friend has approached you with the following financial information about three companies he invested in, all

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S myStanState P( X Bb Documents & C X Bb Bitsch et al.20( X Bitsch et al.20( X M Inbox - nruiz4( X M Inbox (1,613) - xCase Study 2 ( X . Reef - Question XHomeproduct Hel X+Cdocs.google.com/document/d/10T_ze9zSuPm-4tJmrfzIZH39GzHO5EMa2hd_02AatAY/edit#NOApps YouTube Maps M Gmail My Drive - Google...$ myStanState Portal h Hulu @ Pearson Sign In D ReefCase Study 2 (1)a ShareFile Edit View Insert Format Tools Add-ons HelpNAll changes saved in Drive100%Normal textTimes New...12Editing1 2 '1 1 73) A associate has approached you delay the aftercited financial knowledge environing three companiesOutlinehe invested in, all in the similar assiduity. He is arduous to indicate whether to strip from all or8any of these companies for solicitude-alarm of losing his boarding. Using the Altman Z beak, afford himdelay a good-natured-natured description environing the financial condition of each of the companies so that he can reach aCase Study Analysis 2:good-natured firmness and not facilitate his currency to failure. Show your product and elucidate theimplication of the beak of each guild (25 Points).Company ACompany BCompany CTotal Assets$ 8,000,000.00$ 11,000,000.00$5,000,000.00Working Capital$5,000,000.00$50.000.001,500,000.00Retained Earnings$1,000,000.00$15,000.0020,000.00Operating Income$ 10,000,000.00$150,000.00$2,100,000.00Market Appreciate ofEquity$2,000,000.00$100,000.00400,000.00Total Liabilities$500,000.00$ 10,500,000.007,000,000.00Total Sales$ 15,000,000.00$ 2,100,000.00$4,600,000.00Z = 1.2x1 + 1.4x2 + 3.3x3 + 0.6x4 + 1.0xsX1 = Working capital/Total possessions (%)x2 = Retained earnings/Total possessions (%)X3 = Earnings antecedently attention and taxes/Total possessions (%)X4 = Market appreciate of equity/Total liabilities (%)X5 = Sales/Total possessions (enumerate of times)Company A- Z= (1.2) 0.625 + (1.4) 0.125 + (3.3) 1.25 + (0.6) 4 + (1.0) 1.875= 9.325 (Favorable financialcondition)Company B- Z= (1.2) 0.005 + (1.4) 0.001 + (3.3) 0.01 + (0.6) 0.009 + (1.0) 0.19 = 0.2358 (Bankruptcy)Company C- Z= (1.2) 0.3 + (1.4) 0.004 + (3.3) 0.42 + (0.6) 0.057 + (1.0) 0.92 = 2.7 (Probability ofBankruptcy in the direct stranger years)

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