Multiple choice general knowledge

What does the Z score of a firm determine?

  1. Its net profit

  2. Its contribution to GDP

  3. Its future loss

  4. Its creit worthiness
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D Correct answer
Explanation

The Z-score (specifically Altman's Z-score) is a financial model used to predict a company's creditworthiness and bankruptcy risk. It combines multiple financial ratios (working capital, retained earnings, profitability, etc.) into a single score. It does not measure net profit, GDP contribution, or future loss directly. Note: 'creit' is a typo for 'credit'.

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