MODEL A Z-SCORE Definition

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MODEL A Z-SCORE (For Private Manufacturer) Model A is appropriated for a private manufacturing firm. Model A should not be applied to other companies. A Z-Score of 2.90 or above indicates that bankruptcy in not likely, buyt a Z-Score of 1.23 or below is a strong indicator that bankruptcy is likely. Probabilities of bankruptcy within the above ranges are 95% for one year and 70% within two years. Obviously a higher Z-Score is desirable.

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BRAND NAME is a name given to a product or service.

SUBSIDIARY is a company whose voting stock is more that 50% owned by another company.

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