determine whether to divest from all or8any of these companies for fear of losing his investment

Get a 10% discount on an order above
Use the following coupon code :
Get10

Order a Similar Paper Order a Different Paper

A friend has approached you with the following financial information about three companiesOutlinehe invested in, all in the same industry. He is trying to determine whether to divest from all or8any of these companies for fear of losing his investment. Using the Altman Z score, provide himwith a good explanation about the financial status of each of the companies so that he can make aCase Study Analysis 2:good decision and not lose his money to bankruptcy. Show your work and explain theimplication of the score of each company (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 Value 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 = 1.2×1 + 1.4×2 + 3.3×3 + 0.6×4 + 1.0xsX1 = Working capital/Total assets (%)x2 = Retained earnings/Total assets (%)X3 = Earnings before interest and taxes/Total assets (%)X4 = Market value of equity/Total liabilities (%)X5 = Sales/Total assets (number 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 next couple years)

Is this question part of your assignment?

We will write the assignment for you. click order now and get up to 15% Discount

Order a Similar Paper Order a Different Paper

Save your time - order a paper!

Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines

Order Paper Now