Explain What Each Ratio in the Altman Credit Model Measures

question 51

Essay

Explain what each ratio in the Altman credit model measures and explain why higher values of each of the variables predicts lower default probability.

Recognize primary and secondary sources of tax authority.

Determine eligibility criteria for filing Form 1040EZ.

Calculate basic tax liability and understand the factors affecting it.

Understand the procedural aspects of tax law and administrative bodies involved.

---

Definitions:

Salvage Value

The predicted resale value of an asset at the close of its effective life.

Straight-line Method

A depreciation calculation technique that evenly spreads the loss in value of an asset across each year of its expected useful lifespan.

Double-declining-balance Method

A depreciation approach that speeds up the process by using a rate twice that of the typical straight-line method.

Sales Price

The amount of money charged for a product or service, or the sum a customer pays to purchase something.