Bowden Building Supplies Ltd

question 3

Multiple Choice

Bowden Building Supplies Ltd. year-end financial statements show working capital at $1,107,655, total assets of $3,971,090, total liabilities at $2,078,405, retained earnings at $192,685, sales revenue at $5,460,400, EBIT at $326,746, and the market value of common shares at $2,182,020. Using the value from Altman's Z-score model, what can be concluded about the business?

• A) Will probably fail in two years.
• B) Will probably survive over the next two years.
• C) Difficult to classify with any degree of confidence.
• D) Will probably fail in three to five years.
• E) Will probably expand significantly in the next two years.