Final answer:
An Altman Z-score above 3.0 is not an indicator of a potential going-concern problem. Negative trends in profitability, external matters increasing regulatory requirements, and significant changes in competition are indicators that can suggest potential going-concern problems.
Step-by-step explanation:
An Altman Z-score is a financial metric used to assess the probability of a company going bankrupt. It combines various financial ratios to determine the financial health of a company. The Altman Z-score is calculated using factors such as profitability, asset turnover, leverage, liquidity, and solvency.
A higher Altman Z-score indicates a lower probability of a company experiencing financial distress or going out of business. In this context, an Altman Z-score above 3.0 is considered favorable and would not be an indicator of a potential going-concern problem.
On the other hand, negative trends in profitability, external matters increasing regulatory requirements, and significant changes in competition are indicators that can suggest potential going-concern problems. They may signal financial difficulties, market challenges, and increased risks that can affect a company's ability to continue operating.