Response to the following problem:
Suppose that the financial ratios of a potential borrowing firm took the following values:
X1 = Net working capital/ Total assets = .10,
X2 = Retained earnings/Total assets = .20,
X3 = Earnings before interest and taxes/Total assets = .22,
X4 = Market value of equity/Book value of long-term debt = .60,
X5 = Sales/Total assets ratio = 0.9.
Calculate and interpret the Altman's Z-score for this firm.