The CEO of Mabopane Lt approached your bank for a credit facility Following are ratios for Mabopane Ltd for the 2014 financial year. (10)
- Working capital to total asset ratio = 10%
- Retained earnings to total asset ratio = 20%
- Profit before interest and tax to total assets = 15%
- Market value of equity to book value of debt = 115%
- Sales to total assets = 125%
Based on the Altmans Z-Score calculate the risk of bankruptcy for Mabopane Ltd. Briefly comment on the credit decision you will take based on the calculated Z-Score.
