Question 1: What is Cineplex’s Altman Z-Score for 2013 and 2014?
Z = 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + 1.0X5
Where:
X1 = Net Working Capital/Total Assets (it measures liquidity)
X2 = Retained Earnings/Total Assets (it measures the cumulative profitability)
X3 = Earnings before Interest and Tax/Total Assets (it measures the return on assets)
X4 = Equity Market Value/Book Value of Liabilities (it measures the market leverage)
X5 = Total Revenue/Assets (It measures the revenue generating potential of total assets)
X1 = Net Working Capital/Total Assets = -184,021/1,609,416 = -0.11
X2 = Retained Earnings/Total Assets = -123,771 / 1,609,416 = -0.08
X3 = Earnings before Interest and Tax/Total Assets = (97,415 + 21,948) / 1,609,416 = 0.07
X4 = Equity ...