Arcket, Inc

Multiple Choice

Arcket, Inc. is a publicly traded nonmanufacturing company. The following information is available from its financial statements: Net working capital $200,000
Retained earnings $125,000
Earnings before Interest and taxes $375,000
Market value of equity $1,015,000
Book value of total debt $1,750,000
Total assets $2,500,000
Sales $1,500,000
Calculate and interpret the Altman's Z-score for Arcket, Inc.

A) 1.6084; Bankrupt
B) 2.312; Zone of ignorance
C) 1.40816; Zone of ignorance
D) 2.9108; Non-bankrupt