The Z-score of the company. Z-Score: The Z-score or popularly renowned Altman Z-score is an indicator of the creditworthiness of a company which is likely to be bankrupt and is derived on the basis of five ratios, the values of which are represented in the annual report of the company. The companies scoring below 1.8 points are more prone to be bankrupt in the near future whereas the companies scoring 3 or above points are likely to survive.

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Chapter 30, Problem 4QP

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To determine: The Z-score of the company.

Z-Score:

The Z-score or popularly renowned Altman Z-score is an indicator of the creditworthiness of a company which is likely to be bankrupt and is derived on the basis of five ratios, the values of which are represented in the annual report of the company. The companies scoring below 1.8 points are more prone to be bankrupt in the near future whereas the companies scoring 3 or above points are likely to survive.

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