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The Z-score developed as a bankruptcy-prediction model by Altman uses five ratios weighted with beta scores. Z = 1.2 (Working capital/Total assets) + 1.4 ( Retained earnings/Total assets) + 3.3 (Earnings Before Income Taxes/total assets) + 0.99(Sales/Total assets) + 0.6(Market Value of equities/ Total liabilities)

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