Calculate Altman Z score

Calculate Altman Z score 

a) 1.945

b) 2.945

c) 3.945

d) 4.945

The prediction that the company  

a) non bankrupt company 

b) is not on the verge of financial ruin

c)  bankrupt company

d) is  on the verge of financial ruin

e) a and b

d) c and d

1. Working capital = Current assets - current liabilities = 140000 - 70000 = 70,000

2. Total assets = 210000+90000+35000+10000+5000 = 350000

3. Retained earnings. = Reserves & surplus = 30000

4. EBIT = operating profit = 200000

5. Market value of shares = 10000 x 15 = 150000

6. Book value of total debts = Long term liabilities + current liabilities = 150000 + 70000 =

220000.

7. Sales = 200000 x 4 = 800000, since operating profit is 25% on sales.

Conclusion:

Z = 1.2×0.20 + 1.4 × 0.09 + 3.3 × 0.57 + 0.6 × 0.68 + 1.0 × 2.29 = 4.945, say 4.95