Given the Following Data: ROA = 10%; Total Liabilities =

question 22

Multiple Choice

Given the following data: ROA = 10%; total liabilities = 90% of the assets; EBITDA =
10% of liabilities. Calculate the relative chance of failure using the following model:
Log(relative chance of failure) = -6.445 - 1.192 ROA + 2.307 (liabilities/assets) -
0) 346(EBITDA/liabilities)

• A) 1.7%
• B) 1.09%
• C) 0.16%
• D) none of the above

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Definitions:

Quantitative Variables

Variables that can be quantified and measured, having numeric values that represent different magnitudes of the variable.

Information

Data that has been processed, organized, or structured in a way that adds context or meaning, making it useful for decision-making.

Quantitative

Pertaining to the measurement or quantification of variables; involving numerical data that can be analyzed statistically.

Categorical

Relating to, describing, or based on categories, often used in statistics to refer to variables that represent types rather than numbers.