Altman’s Z Score Model (1968) specifies z as Z (Public) = 1.2X1+1.4X2+3.3X3+0.6X4+1.0X5 Where if the company...

Question

Question

Altman’s Z Score Model (1968) specifies z as

Z (Public) = $LaTeX: 1.2X_{1} + 1.4X_{2} + 3.3 X_{3} + 0.6 X_{4} + 1.0 X_{5}$ 1.2X1+1.4X2+3.3X3+0.6X4+1.0X5

Where if the company is healthy if z>?

Options:

1. 0

2.2.99

3. 1

4.1.99

Answer 1

Answer #1

ALTMAN Z SCORE IS DEFINED AS FOLLOWS :

Z < 1.81 : DISTRESS ZONE

1.81 < Z < 2.99 : GREY ZONE

Z > 2.99 : SAFE ZONE

SO ACCORDINGLY, FIRM IS HEALTHY IS Z > 2.99

ANSWER : 2 . 2.99 (THUMBS UP PLEASE)

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Answer 2

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