Question: Credit Scoring: A Decline in Credit Quality? (Medium) The following numbers are extracted from the financial statements for a firm for 2011 and 2012. Amounts are in millions of dollars.
At the end of 2011, the firms 80 million shares traded at $25 each, but by the end of 2012 they traded at $15. Commentators blamed the drop on an increase in the risk of bankruptcy. Conduct a credit scoring analysis that indicates how much the likelihood of bankruptcy increased over the year.