Question

Calculate the altman Z-score that is the question

12. Calculate the market-to-book ratio of the company as of Feb 2, 2019. This is the Feb 2, 2019 market capitalization of the stock divided by the latest book value of shareholders' equity. Target's stock closed at $68.97 per share on the last trading day of the fiscal year, which was Feb 1, 2019. Shane price X share

Answer 1

Altman Z-score = (1.2 * working capital to total assets) + (1.4 * retained earnings to total assets) + (3.3 * EBIT to total assets) + (0.6 * market value of equity to total liabilities) + (1.0 * sales to total assets)

working capital = total current assets - total current liabilities = 12,540 - 13,052 = -512

total assets = 40,303

retained earnings = 6,495

EBIT = operating income = 4,110

market value of equity = price per share * shares outstanding = $68.97 * 517,761,600 = $35,710,017,552, which is $35,710 million

total liabilities = total current liabilities + total noncurrent liabilities = 13,052 + 15,600 = 28,652

sales = 74,433

Altman Z-score = (1.2 * working capital to total assets) + (1.4 * retained earnings to total assets) + (3.3 * EBIT to total assets) + (0.6 * market value of equity to total liabilities) + (1.0 * sales to total assets)

Altman Z-score = (1.2 * (-512 / 40,303)) + (1.4 * (6,495 / 40,303)) + (3.3 * (4,110 / 40,303)) + (0.6 * (35,710 / 28,652)) + (1.0 * (74,433 / 40,303))

Altman Z-score = 3.14

An Altman Z-score of 3 and above means that the company is unlikely to file for bankruptcy

No, the Altman Z-score does not suggest a high level of bankruptcy risk. It suggests a low level of bankruptcy risk.