“Z- score”
Date calculated 17-Nov-04
Company Lucent 9/30/03
Data used AAII stock investor
Data input
Working Capital = Current Assets – Current Liabilities
Current Assets $7,833
Current Liabilities $5,015
Working Capital $2,818
Total Assets $15,765
Retained Earnings -$3,371
Operating Income $0
Market Cap. + preferred stock $9,000
Total Debt $5,980
Sales $8,470
Z- score Results 1.41
What are the chances of bankruptcy ?
1.80 or less Very High
1.81 to 2.7 High
2.8 to 2.9 Possible
3.0 or higher Not Likely
Formulas Used
(Working Capital / Total Assets * 1.2 ) 0.21
+ ( Retained Earnings/ Total Assets * 1.4) -0.30
+ (Operating Income/Total Assets * 3.3 ) 0.00
+ (Market Value of Common and preferred Stock / Total Debt * .6 ) 0.90
+ (Sales / Total Assets * 1.1 ) 0.59
Score Probability of Short-term illiquidity 1.41
Here is a site which describes altman z scores with calculators