QUESTION 5 10 points Save Answer Question 5 (15 Marks) Consider the following information for Company X: Working capital $3,000,000 Total assets $20,000,000 Earnings before tax $300,000 Retained earnings $4,500,000 Earnings before interest and tax $800,000 Market value of equity $90,000,000 Book value of liabilities $15,000,000 Sales $9,000,000 (a) For the above information, compute Altman's z-score. (5 marks) (b) What is your interpretation of this score? (2 marks) (c) List two reasons why Company X could fail in the future. (2 marks) (d) If the company did fail in the future, there could be associated costs. Name at least two direct costs and two indirect costs. (4 marks) (e) Apart from Altman's Z-score, explain one other method to assess corporate distress that involves financial information. (2 marks) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). B I U S Paragraph Open Sans sa... 10pt : A TX 4 O Q = SEE X2 X2 ... TT ABC TT * 2 e H E. Ex: + E B () # QUESTION 5 10 points Save Answer Question 5 (15 Marks) Consider the following information for Company X: Working capital $3,000,000 Total assets $20,000,000 Earnings before tax $300,000 Retained earnings $4,500,000 Earnings before interest and tax $800,000 Market value of equity $90,000,000 Book value of liabilities $15,000,000 Sales $9,000,000 (a) For the above information, compute Altman's z-score. (5 marks) (b) What is your interpretation of this score? (2 marks) (c) List two reasons why Company X could fail in the future. (2 marks) (d) If the company did fail in the future, there could be associated costs. Name at least two direct costs and two indirect costs. (4 marks) (e) Apart from Altman's Z-score, explain one other method to assess corporate distress that involves financial information. (2 marks) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). B I U S Paragraph Open Sans sa... 10pt : A TX 4 O Q = SEE X2 X2 ... TT ABC TT * 2 e H E. Ex: + E B () #