Q2. MNO Inc., a publicly traded manufacturing firm in the United States, has provided the...
60.1K
Verified Solution
Link Copied!
Question
Finance
image
Q2. MNO Inc., a publicly traded manufacturing firm in the United States, has provided the following financial information in its application for a loan. All numbers are in thousands of dollars Assets Cash Accounts receivables Inventory Liabilities and Equity Accounts payable Notes payable Accruals Long-term debt Equity (ret. earnings $22 400 Total liabilities and equityS700 S 20 90 90 S 30 90 30 Plant and equipment Total assets 500 S700 Also assume sales $500,000 cost of goods sold $360,000; and the market value of equity is equal to the book value a. What is the Altman discriminant function value for MNO Inc.? Recall that Net working capital Current assets Current liabilities Current assets = Cash + Accounts receivable + inventories. Current liabilities- Accounts payable + Accruals + Notes payable EBIT-Revenues Cost of goods sold Altman's discriminant function is given by: Z-1.2X1+ 1.4X2 + 3.3X3 + 0.6X4+ /.0X All numbers are in $000s b.Based on the Altman's Z-score only, should you approve MNO Inc.'s application to your bank for a S500,000 capital expansion loan
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
