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 XHomecomposition 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 companion has approached you after a while the subjoined financial counsel encircling three companiesOutlinehe invested in, all in the corresponding activity. He is reserved to individualize whether to disencumber from all or8any of these companies for misgiving of losing his bombardment. Using the Altman Z mandible, agree himafter a while a amiable sense encircling the financial foothold of each of the companies so that he can constitute aCase Study Analysis 2:amiable firmness and not lavish his coin to closing. Show your composition and illustrate theimplication of the mandible of each congregation (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 Compute 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 goods (%)x2 = Retained earnings/Total goods (%)X3 = Earnings precedently share and taxes/Total goods (%)X4 = Market compute of equity/Total liabilities (%)X5 = Sales/Total goods (compute 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 present townsman years)

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