Explain the Major Concept of Altman's Linear Discriminant Model

question 34

Essay

Explain the major concept of Altman's linear discriminant model.What would you consider to be the major disadvantages of this model?

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Definitions:

Investment

An investment is the allocation of resources, such as time, money, or effort, in expectation of generating an income or profit.

Net Income

The total earnings of a company after subtracting all expenses, including taxes and operating costs, from its total revenue.

Owners' Equity

The residual interest in the assets of an entity after deducting liabilities, representing the ownership interest of shareholders or owners.

Investment

The allocation of resources, usually money, in the expectation of generating an income or profit.