Question

Smith & Smith has a bond rating of B and an Altman s Z-score of 1.0. This suggests that:

Answer 1

"The firm has high credit risk" is the correct answer.

Step-by-step explanation:

• A Z-Score exceeding 2.99 indicates an organization becomes focused mostly on the economic projections throughout the safe space. Throughout the Grey Zone, a Z-Score among 1.8 as well as 2.99 means that there is indeed a reasonable possibility that the business will go bankrupt throughout the next 2 years.
• In the meantime, mostly in Distress Zone, just one Z-Score under 1.80 suggests a high likelihood of discomfort during this timeframe.