Question
In: Finance
Which of the following concepts is not captured by one of the variables in Altman's Z-Score?...
Which of the following concepts is not captured by one of the variables in Altman's Z-Score?
| A. |
Current level of efficiency |
|
| B. |
Current level of profitability |
|
| C. |
Current level of net operating assets |
|
| D. |
Current level of liquidity |
Solutions
Expert Solution
The Altman Z-score is the output of a credit-strength test that gauges a publicly-traded manufacturing company's likelihood of bankruptcy. The Altman Z-score is based on five financial ratios that can calculate from data found on a company's annual report. It uses profitability, leverage, liquidity, solvency, and activity to predict whether a company has a high probability of becoming insolvent.
Hence ANSWER "A " Current level of efficiency
jeff jeffy answered 3 years agoRelated Solutions
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please discuss Altman's Z-score Bankruptcy Prediction Model in a
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Which of the following does not properly describe the Altman Z-score? Multiple Choice The Z-score is...
Which of the following does not properly
describe the Altman Z-score?
Multiple Choice
The Z-score is a multiple discriminant analysis using five
financial ratios to estimate default risk.
A high score is an indication of default risk.
The Z-score was originally designed only for publicly traded
manufacturing firms.
Each ratio has its own unique weight in calculating the final
score.
Cash flow assessment plays a central role in analyzing:
Multiple Choice
the future earnings potential of a company.
the credit...
The Z-score bankruptcy model uses balance sheet and income information to arrive at a Z-Score, which...
The Z-score bankruptcy model uses balance sheet and income
information to arrive at a Z-Score, which can be used to predict
financial distress. The Model follows:
Z= ((Working capital / Total assets) x 1.2) + ((Retained
earnings /Total assets ) x 1.4) + ((EBIT / Total Assets) x 3.3) +
((Sales / Total assets ) x 0.99) + ((MV Equity / total liabilities)
x 0.6)
EBIT is Earnings before Interest and Taxes.
MB Equity is the market value of common...
Compute and Interpret Altman's Z-scores Following is selected financial information for Netflix, for 2018 and 2017....
Compute and Interpret Altman's Z-scores
Following is selected financial information for Netflix, for
2018 and 2017.
$ thousands, except per share data
2018
2017
Current assets
$9,694,135
$7,669,974
Current liabilities
6,487,320
5,466,312
Total assets
25,974,400
19,012,742
Total liabilities
20,735,635
15,430,786
Shares outstanding
436,598,597
433,392,686
Retained earnings
2,942,359
1,731,117
Stock price per share
267.66
191.96
Sales
15,794,341
11,692,713
Earnings before interest and taxes
1,605,226
838,679
Compute and interpret Altman Z-scores for the company for both
years. (Do not round until your...
Compute and Interpret Altman's Z-scores Following is selected financial information for Netflix, for 2018 and 2017....
Compute and Interpret Altman's Z-scores Following is selected
financial information for Netflix, for 2018 and 2017. $ thousands,
except per share data 2018 2017 Current assets $9,694,135
$7,669,974 Current liabilities 6,487,320 5,466,312 Total assets
25,974,400 19,012,742 Total liabilities 20,735,635 15,430,786
Shares outstanding 436,598,597 433,392,686 Retained earnings
2,942,359 1,731,117 Stock price per share 267.66 191.96 Sales
15,794,341 11,692,713 Earnings before interest and taxes 1,605,226
838,679 Compute and interpret Altman Z-scores for the company for
both years. (Do not round until your...
Find the z-score for which the area to the left is 0.20.
Find the z-score for which the area to the left is 0.20.
Calculate the standard score (Z-Score) and indicate where the Z-Score would be on a Standard Normal...
Calculate the standard score (Z-Score) and indicate where the
Z-Score would be on a Standard Normal Distribution (draw the normal
distribution)
μ = 85 and σ = 15; x = 110
μ = 120 and σ = 12.5; x = 80
μ = 100 and σ = 20; x = 118
Compute and Interpret Altman's Z-scores Following is selected financial information for eBay Inc., for its fiscal...
Compute and Interpret Altman's Z-scores
Following is selected financial information for eBay Inc., for
its fiscal years 2016 and 2015.
(In millions, except per share data)
2016
2015
Current assets
$ 8,875
$ 7,904
Current liabilities
3,847
2,263
Total assets
23,847
17,755
Total liabilities
13,308
11,179
Shares outstanding
530
741
Retained earnings
14,959
7,713
Stock price per share
29.69
27.48
Sales
8,979
8,592
Earnings before interest and taxes
2,325
2,197
Compute and interpret Altman Z-scores for the company for both...
Compute and Interpret Altman's Z-scores Following is selected financial information for eBay Inc., for its fiscal...
Compute and Interpret Altman's Z-scores Following is selected
financial information for eBay Inc., for its fiscal years 2016 and
2015. (In millions, except per share data) 2016 2015 Current assets
$ 8,875 $ 7,904 Current liabilities 3,847 2,263 Total assets 23,847
17,755 Total liabilities 13,308 11,179 Shares outstanding 530 741
Retained earnings 14,959 7,713 Stock price per share 29.69 27.48
Sales 8,979 8,592 Earnings before interest and taxes 2,325 2,197
Compute and interpret Altman Z-scores for the company for both...
Compute and Interpret Altman's Z-scores Following is selected financial information for ebay, for its fiscal years...
Compute and Interpret Altman's Z-scores Following is selected
financial information for ebay, for its fiscal years 2005 and 2006.
(In millions, except per share data) 2006 2005 Current assets $
4,972.59 $3,185.24 Current liabilities 2,518.39 1,484.93 Total
assets 13,491.01 11,785.99 Total liabilities 2,584.38 1,736.00
Shares outstanding 1,364.51 1,400.18 Retained earnings 4,543.35
2,824.64 Stock price per share 31.07 44.22 Sales 5,967.74 4,550.40
Earnings before interest and taxes 1,444.77 1,450.18 Compute and
interpret Altman Z-scores for the company for both years. (Do...
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