A Number of Studies of Bankruptcies Have Shown That Certain

question 106

True/False

A number of studies of bankruptcies have shown that certain combinations of ratios,like the Altman Z-score,have good predictive power in indicating the likelihood of bankruptcy.

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Definitions:

External Transactions

Financial activities involving an entity and another party outside the entity, such as sales, purchases, and financing agreements.

Basic Accounting Equation

The fundamental principle of accounting: Assets = Liabilities + Equity, reflecting the balance of a company's financial position.

Internal Transactions

Financial activities that occur within an organization, affecting the internal accounts without involving any external entity.

Chronological Diary

A record of events or transactions arranged in the order of time occurrence, often used for maintaining personal or financial information.