If a Company Has an Altman Z-Score of 1

question 45

Multiple Choice

If a company has an Altman Z-score of 1.7, the company would be classified in the __________.

• A) distress zone, or at significant risk of bankruptcy
• B) gray zone, or at risk of bankruptcy
• C) safe zone, not currently at risk of bankruptcy
• D) green zone, no risk of bankruptcy

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Definitions:

Fair Values

The estimated price at which an asset or liability could be exchanged between knowledgeable, willing parties in an arm's length transaction.

European Companies

Firms based in one of the countries in Europe, subject to the region's regulatory, economic, and market conditions.

General Journal

A comprehensive accounting record of all transactions made by a company, listed in chronological order before posting to accounts in the general ledger.

Appliance Repair Business

A business focused on fixing and maintaining home or commercial appliances.