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Non-Tech : Tyco International Limited (TYC)

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To: Bob Rudd who wrote (3425)6/20/2002 5:50:52 PM
From: deeno  Read Replies (2) of 3770
 
Heres a Bankruptcy model for you.

Altman's Bankruptcy Predictor (or Z-score) calculation.

Z=(1.2*X1)+(1.4*X2)+(3.3*X3)+(0.6*X4)+(1.0*X5)

X1 = Working capital/ Total Assets = WC/TA

X2= Retained Earnings/ Total Assets = RE/TA

X3= EBIT/ Total Assets = EBIT/TA

X4= Market Value of Equity/ Book Vlaue of Liabilities = MVE/ BVTL

X5= Total Sales/ Total Assets = TS/TA

The Altman Z-score is used to determine a companys short-term outlook or future viability, where,

>3.0 ... Strong
1.8-3.0 ..... In Danger
<1.8 ..... Near death
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