Which of the Following Financial Ratios Has the Highest Weight

question 52

Multiple Choice

Which of the following financial ratios has the highest weight in Altman's Z-score estimation?

• A) Working capital/total assets
• B) Retained earnings/total assets
• C) EBIT/total assets
• D) Sales/total assets

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Definitions:

External Environment

The external factors, forces, situations, and events outside the organization that can affect its performance.

Internal Environment

Factors within a company such as culture, employees, policies, and internal relationships, that influence its operations and performance.

Fiscal Year

A twelve-month period used for accounting purposes and preparing financial statements.

Measurable

Capable of being quantified or precisely assessed.