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Question 1: Please help me to arrive at the correct ALTMAN'S Z-SCORE based on the
EXHIBIT 8: COMPETITOR COMPANY DATA (IN US$ MILLIONS, FOR FISCAL YEAR ENDINGDECEMBER 2016 / JANUARY 2017)CompanyDillard'sKOHL'SMacy'sNordstromInc.Corp.Inc.Inc.AmazonInventory1,3754.0385,5061,94511,461Current Assets1,6695,0767,6523,01445,781Total Assets3.86613,60620.5767,69883,420Current Liability7512,7145,7282,91143,816Total Liability2.0708,11516,3266 82764,117Revenue6,75519.20427.07914.437135,987Gross Profit2.4046,93910,5835,26965,932Operating Profit4571,5532,0391,1014,186Net Profit2696731,0726002,371Source: Created by the case authors with information from "Dillard's Inc. DOS: Income Statement," Momingstar, accessedMarch 20. 2018, https:/financials.morningstar.com/income statementis.html71=0P000001085culture=en-US&platform=sal;"Kohl's Corp KKS: Income Statement," Momingstar, accessed March 20, 2018, https //financials.momingstar.comincomestatementis.html?t-OP0000035Z&culture=en-US&platform=sal; "Macy's Inc. M: Income Statement," Momingstar, accessedMarch 20, 2018, https:/financials.morningstar.comincome-statementis.html?t=OP00000246& culture=en-US&platform=sal;"Nordstrom Inc. JWN: Income Statement," Momingstar, accessed March 20, 2018, https //financials.momingstar.com/income-statement/is.html71=0P000003XP&culturemen-US&platform=sal; "Amazon.com Inc. AMZN: Income Statement," Momingstar,US&platform=sal.accessed March 20, 2010, https:/financials.morningstar.com/income-statementis.him/71=0P00000087&culture=en-EXHIBIT 9: Z-SCORE FORMULA FOR NON-MANUFACTURING FIRMSX1 = (Current Assets - Current Liabilities) + Total AssetsX = Retained Earnings + Total AssetsX, = Earnings before Interest and Taxes + Total AssetsX4 = Book Value of Equity + Total LiabilitiesZ-Score Bankruptcy Model: Z = 6.56(X1) + 3.26(X2) + 6.72(X3) + 1.05(Xq)Zones of Discrimination: 2 > 2.9 = Safe Zone; 1.23 < Z < 2.9 = Grey Zone; Z < 1.23 = Distress ZoneA Z-score was calculated by substituting the values in the given formulas from the financial statements ofthe company under investigation. The value indicated the company's current degree of financial distress.For example, a score of 1.1 indicated that the company had a very high probability of going bankrupt,whereas a score of more than 2.9 indicated that the company was out of harm's way.
