# Computation of z score

Given the following numbers:

Working capital $ 90,000

Total assets 620,000

Retained earning 30,000

Earnings before interest and taxes 55.000

Market value of equity 100,000

Book value of total debt 280,000

Sales 440,000

a) Compute the z score for the data company.

b) Considering the Altman model, comment on the likelihood that this firm will experience financial failures.

https://brainmass.com/statistics/z-test/computation-zscore-521231

#### Solution Preview

Computation of z score:

working capital $ 90,000

total assets 620,000 ...

#### Solution Summary

This solution shows how to calculate the Z-score for a company given their financial statement, and discusses the likelihood that the company will experience financial failure based on those numbers and the Altman model.

$2.19