The original z-score formula intended for public manufacturing companies is shown below:

Altman Z-Score = (1.2 X1) + (1.4 X2) + (3.3 X3) + (0.6 X4) + (0.99 X5)

The inputs for our z-score calculation are the following:

• X1 = Working Capital Total Asset
• X2 = Retained Earnings Total Assets
• X3 = EBIT Total Assets
• X4 = Market Capitalization Total Liabilities
• X5 = Sales Total Assets

The following assumptions will be used for our modeling exercise.

• Current Assets= $60 million
• Current Liabilities = $40 million
• Fixed Assets= $100 million
• Net Income= $10 million
• Dividends = $2 million
• Sales = $60 million
• COGSand SG&A = $40 million
• P/E Multiple = 8.0x
• Total Liabilities = $120 million

What is the Z-score?