In: Accounting
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 | $ 4,975.59 | $ 3,188.24 |
| Current liabilities | 2,519.39 | 1,485.93 |
| Total assets | 13,490.01 | 11,784.99 |
| Total liabilities | 2,593.38 | 1,745.00 |
| Shares outstanding | 1,365.51 | 1,401.18 |
| Retained earnings | 4,537.35 | 2,818.64 |
| Stock price per share | 30.07 | 43.22 |
| Sales | 5,967.74 | 4,550.40 |
| Earnings before interest and taxes | 1,441.77 | 1,447.18 |
Compute and interpret Altman Z-scores for the company for both
years. (Do not round until your final answer; then round your
answers to two decimal places.)
2006 z-score = Answer
2005 z-score = Answer