Company ABC has the following information. Please calculate the Z-core for 2021 and 2022 and provide a comment on its performance. Variables 2022 2021 X1(net working capital /total asset) 0.56 0.175 X2(retained earnings/total asset) -0.12 0.08 X3(EBIT/total assets) 0.56 0.69 X4(market value of equity/book value of total liability) 1.2 0.96 X5(sales/total asset) 0.78 0.63 Z-score (1.2X1+1.4X2+3.3X3+0.6X4+1X5) 3.852 3.805

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Company ABC has the following information. Please calculate the Z-core for 2021 and 2022 and provide a comment on its performance.

Variables

2022

2021

X1(net working capital /total asset)

0.56

0.175

X2(retained earnings/total asset)

-0.12

0.08

X3(EBIT/total assets)

0.56

0.69

X4(market value of equity/book value of total liability)

1.2

0.96

X5(sales/total asset)

0.78

0.63

Z-score (1.2X1+1.4X2+3.3X3+0.6X4+1X5)

3.852

3.805

 

 

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