The following information is available for Claire’s Stores from January 2013 through January 2017. In the last column, the median industry values are reported for apparel and accessory stores. Assets and revenues are in millions of dollars, balance sheet percentages are a percentage of total assets, income statement percentages are a percentage of total revenues, and the statements of cash flow percentages are a percentage of total assets.

Required:
1. Evaluate the performance of Claire’s Stores over time. Is there a year, where you first become concerned about the likelihood of bankruptcy?
2. Because Claire’s is a private company, the market value of equity is unknown. Compute the Z- score for private firms. Make an assessment of the likelihood of bankruptcy during 2018.

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Claire's Stores Inc. (dollars in thousands) Balance Sheet Assets Total Liabilities Stockholders' equity Selected Balance Sheet Current Assets Current Liabilities Accounts Receivables Inventory Long-term debt Retained earnings Income Statement Total Revenues Cost of goods sold Gross margin Operating income Net income January 2013 2,799,272 2,561,976 237,296 373,827 251,736 157,549 2,373,366 (636,116) 1,557,020 755,996 801,024 236,168 1,282 January 2014 2,694,026 2,563,507 130,519 283,001 251,158 178,882 2,378,786 (701,423) 1,513,177 753,631 759,546 171,772 (65,307) January 2015 January 2016 2,426,328 2,525,201 (98,873) 220,146 232,901 2,213,555 2,520,233 1,494,251 767,459 726,792 11,460 (211,978) (306,678) 212,755 273,566 145,908 151,954 2,346,229 2,351,072 (913,401) (1,149,836) 1,402,860 734,067 668,793 (14,561) (236,435) January 2017 2,000,206 2,282,897 (282,691) 225,943 234,631 130,239 2,137,058 (1,095,937) 1,311,316 682,828 628,488 (63,718) 53,899 Median Industry 2016 848,744 48% 52% 54% 26% 28% 18% 27% 1,442,718 62% 38% 5% 3%