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Taffler Zscore

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Taffler Zscore


1. The problem is to calculate the z-score for Taffler's Z-Score, which is a financial distress prediction model. 2. The formula for Taffler's Z-Score is: $$Z = 3.25 + 6.56 \times \frac{\text{Working Capital}}{\text{Total Assets}} + 3.26 \times \frac{\text{Retained Earnings}}{\text{Total Assets}} + 6.72 \times \frac{\text{Earnings Before Interest and Tax}}{\text{Total Assets}} + 1.05 \times \frac{\text{Market Value of Equity}}{\text{Total Liabilities}}$$ 3. Important rules: - Each ratio is a financial metric normalized by total assets or total liabilities. - The coefficients are weights derived from statistical analysis. - The final Z-Score helps assess the likelihood of financial distress. 4. To calculate, you need the values for Working Capital, Retained Earnings, EBIT, Market Value of Equity, Total Assets, and Total Liabilities. 5. Substitute the values into the formula and perform the multiplications and additions step-by-step. 6. The final Z-Score is the sum of all terms. 7. Interpretation: A higher Z-Score indicates lower risk of financial distress. Since no specific values were provided, please provide the financial data to compute the exact Z-Score.