Edward I. Altman developed a multivariate model to predict bankruptcy. The model produces an overall discriminant score called a Z value. Which of the following statements is probably an unreasonable statement relating to the Z value?
a. The sales generating ability of the firm's assets is one of the important considerations in the Z value.
b. The lack of a market value for a company's stock will reduce the significance of the Z value approach.
c. Total assets is an important consideration in the Z value computation.
d. Cumulative profitability over time is considered in the Z value computation.
e. A Z score of 2.00 or below indicates a very healthy company.
E
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