What is the Altman discriminant function value for MNO Inc.? Recall that:

Net working capital = current assets minus current liabilities Current assets = cash + accounts receivable + inventories Current liabilities = accounts payable + accruals + notes payable EBIT = revenues - cost of goods sold - depreciation

Taxes = (EBIT - interest)(tax rate)
Net income = EBIT - interest - taxes
Retained earnings = net income (1 - dividend payout ratio)

(b)  Should you approve MNO Inc.'s application to your bank for a $500 capital expansion loan?

(c)  Would the discriminant function change for firms in different industries? What are the implications for the use of these types of models by FIs?

Answer rating: 100% (QA)

To calculate the Altman discriminant function value for MNO Inc we need specific financial data such as net working capital current assets current lia... View the full answer