Question 4 Not complete Marked out of 1,00 P Rag question Bankruptcy Risk and Z-Score Analysis Following are selected ratios for Logitech International SA for the company's 2019 fiscal year

Answer

Z-score=1.2 (A)+ 1.4 (B)+ 3.3 (C)+0.6(D)+1.0(E)

A = Working Capital (Current Assets – Current Liabilities) / Total Assets

B= Retained Earnings / Total Assets

C= Earnings Before Interest & Taxes (EBIT) / Total Assets

D= Market Value of Equity (Mkt. Cap. + Preferred Stock) / Total Liabilities

E= Sales / Total Assets

Now we calculate Z-Score as below:

A=(Current assets-current liabilities)/Total asset

=(1,417,958-753,710)/2,125,330

A=0.31253876

B=Retained earnings/Total assets

=1,433,288/2,125,330

B=0.67438374

C=EBIT/Total assets

=276,354/2,125,330

C=0.13002875

D= Market Value of Equity (Mkt. Cap. + Preferred Stock) / Total Liabilities

=(165,862,887*39.34)/890,174,000

D=7.34125884

E=Sales / Total Assets

=2,927,738/2,125,330

E=1.37754513

Z-Score=1.2*0.31253876+1.4*0.67438374+3.3*0.13002875+0.6*7.33007926+1*1.37754513

=0.37504651+0.94413724+0.42909487+4.39804756+1.3774513

Altman z-score=7.52

Since the Z-score is greater than 3,the balancehseet is safe