Compute the value of Altman’s Z-score for Delta Air Lines for each year from 2000-2004.
. Delta Air Lines is one of the largest airways in the United States. It has operated on the verge of chapter for a number of years. Exhibit 5.18 presents chosen monetary knowledge for Delta Air Lines for each of the 5 years ending December 31, 2000, to December 31, 2004. Delta Air Lines filed for chapter on September 14, 2005. We advocate that you just create an Excel spreadsheet to compute the values of the ratios and the Altman’s Z-score in Components a and b, respectively.
Monetary Knowledge for Delta Air Lines
(quantities in hundreds of thousands besides per share quantities) (Downside 5.15)
| Monetary Knowledge for Delta Air Lines (quantities in hundreds of thousands besides per share quantities) (Downside 1) |
|||||
| Year EndedDecember 31: | 2004 | 2003 | 2002 | 2001 | 2000 |
| Gross sales
Web Earnings (Loss) earlier than Curiosity and Taxes |
$15,002
$(three,168) |
$14,087
$ (432) |
$13,866
$(1,337) |
$13,879
$(1,365) |
$15,657
$ 1,829 |
| Curiosity Expense | $ 824 | $ 757 | $ 665 | $ 499 | $ 380 |
| Web Earnings (Loss) | $(5,198) | $ (773) | $(1,272) | $(1,216) | $ 828 |
| Present Belongings | $ three,606 | $ four,550 | $ three,902 | $ three,567 | $ three,205 |
| Complete Belongings | $21,801 | $25,939 | $24,720 | $23,605 | $21,931 |
| Present Liabilities | $ 5,941 | $ 6,157 | $ 6,455 | $ 6,403 | $ 5,245 |
| Lengthy-Time period Debt | $12,507 | $11,040 | $ 9,576 | $ 7,781 | $ 5,797 |
| Complete Liabilities
Retained Earnings (Deficit) |
$27,320
$ (four,373) |
$26,323
$ 844 |
$23,563
$ 1,639 |
$19,581
$ 2,930 |
$16,354
$ four,176 |
| Shareholders’ Fairness
Money Stream Offered by Operations |
$ (5,519)
$(1,123) |
$ (384)
$ 142 |
$ 1,157
$ 225 |
$ four,024
$ 236 |
$ 5,577
$ 2,898 |
| Excellent | 139.eight | 123.5 | 123.four | 123.2 | 123.zero |
| Market Value per Share | $ 7.48 | $ 11.81 | $ 12.10 | $ 29.26 | $ 50.18 |
Widespread Shares
Required
a. Compute the value of each the following danger ratios.
(1) Present Ratio (at the finish of 2000-2004)
(2) Working Money Stream to Present Liabilities Ratio (for 2001-2004)
(three) Liabilities to Belongings Ratio (at the finish of 2000-2004)
(four) Lengthy-Time period Debt to Lengthy-Time period Capital Ratio (at the finish of 2000-2004)
(5) Working Money Stream to Complete Liabilities Ratio (for 2001-2004)
(6) Curiosity Protection Ratio (for 2000-2004)
b. Compute the value of Altman’s Z-score for Delta Air Lines for each year from 2000-2004.
c. Utilizing the analyses in Components a and b, talk about the most essential elements that signaled the chance of chapter of Delta Air Lines in 2005.
