Get premium membership and access questions with answers, video lessons as well as revision papers.
Z = 1.2 X1+1.4X2+3.3X3+0.6X4+1.0X5
X1 =Working capital/total assets
X2=Retained earnings/total assets
X3= EBIT/ Total assets
X4= Market value of equity/ book value of long-term debt
X5= Sales/total assets
X1: 1 777 000/25 678 000 = 0.0692
X2: 177 000/25 678 000 = 0.00689
X3: 2 605 000/25 678 000= 0.10145
X4:10 098 000/ 5 044 000 = 2.002
X5: 30 000 000/25 678 000= 1.1683
Z = 1.2 (0.0692) +1.4(0.00689) +3.3(0.10145) +0.6(2.002) +1.0(1.1683)
= 0.08304+0.009646+0.3348+1.2912+1.1683 =2.796986
= 2.7970
A Z score of greater than 1.8 but less than 2.99 does not provide a clear financial health of a company. Therefore, am not sure about the firm’s level of financial risk
simpleman Anto answered the question on February 8, 2018 at 11:32
- Prepare a net value added statement for the year ended 31st December, 2015(Solved)
The information below relates to Jumuia Ltd, a listed company for the year ended 31st December, 2015
Shs
Purchase of raw materials 10 200 000
Turnover 25 160 000
Salaries and wages 6 800 000
Taxation for the year 2 040 000
Dividends 816 000
Depreciation 1 360 000
Water, power and insurance 2 040 000
Finance charge and leases 680 000
Date posted: February 8, 2018. Answers (1)
- What is a research problem?Give three examples to illustrate your answer.(Solved)
What is a research problem?Give three examples to illustrate your answer.
Date posted: January 5, 2018. Answers (1)
- What is a policy in insurance?(Solved)
What is a policy in insurance?
Date posted: December 15, 2017. Answers (1)
- Give six challenges facing kussco operations in Kenya.(Solved)
Give six challenges facing kussco operations in Kenya.
Date posted: December 12, 2017. Answers (1)
- Give four securities that a member may use to borrow capital development loan from a sacco.
(Solved)
Give four securities that a member may use to borrow capital development loan from a sacco.
Date posted: December 12, 2017. Answers (1)
- Outline the contents of a loan withdrawal voucher.
(Solved)
Outline the contents of a loan withdrawal voucher.
Date posted: December 12, 2017. Answers (1)
- Outline four sources of funds of a cooperative society.(Solved)
Outline four sources of funds of a cooperative society.
Date posted: December 12, 2017. Answers (1)
- Give six reasons that led to the establishment of the cooperative saving scheme.(Solved)
Give six reasons that led to the establishment of the cooperative savings scheme.
Date posted: December 12, 2017. Answers (1)
- Cite companies that do not need the consumer orientation concept of marketing.(Solved)
Cite companies that do not need the consumer orientation concept of marketing.
Date posted: October 3, 2017. Answers (1)
- Give the techniques of managing public debt(Solved)
Give the techniques of managing public debt
Date posted: September 30, 2017. Answers (1)
- What is the difference between capital and money markets?(Solved)
What is the difference between capital and money markets?
Date posted: September 28, 2017. Answers (1)
- What are the purposes of taxation in kenya?(Solved)
What are the purposes of taxation in kenya?
Date posted: September 17, 2017. Answers (1)
- Differentiate between impact of tax and incidence of tax?(Solved)
Differentiate between impact of tax and incidence of tax?
Date posted: September 17, 2017. Answers (1)