Question:
The following is selected information for Procter & gamble and Johnson and Johnson for recent financial statement.
|
$ Million
|
Proctor &Johnson
|
Johnson & Johnson
|
|
Working capital
|
$ (5,323
|
$24,235
|
|
Retaining earning
|
70,682
|
77,773
|
|
Earning before tax and interest
|
16,020
|
17,402
|
|
Market value of equity
|
175,816
|
243,581
|
|
Sales
|
82,559
|
61,587
|
|
Total assets
|
138,354
|
102,908
|
|
Total Liabilities
|
70,353
|
46,329
|
1. Compute and compare the Altman Z-scores for each company.
2. Either company likely to go bankrupt in the short term? Explain.