Using Altman's model for predicting bankruptcy presented in this chapter, determine the Z-score index for each company. On the basis of these indexes, is either company likely to go into bankruptcy? Why?

380 Part IV Tools of Financial A n a l y s i s and Control FA@ ki Solutions to Self- correction Problems Current ratio 1.19 1.25 1.20 Acid-test ratio .43 .46 .40 Average collection period 18 22 27 Inventory turnover NA* 8.2 6.1 Total debt to net worth 1.38 1.40 1.61 Long-term debt to total capitalization .33 .32 .32 Cross profit margin ,200 .I63 ,132 Net profit margin ,075 .047 ,026 Asset turnover 2.80 2.76 2.24 Return on assets .21 .13 .06

'NA, not applicable.