Problem
A. Using the financial statements of the a2 Milk Company Limited (A2M) calculate the Altman Z-score value for the prior three years. Use year-end share price/market capitalization, if needed. You can get this data from DatAnalysis or from web search.
Altman Z-score 2019 2020 2021
Evaluate the bankruptcy risk of A2M over the prior three years.
Explain the change in Z-score over the prior three years.
B. Would the Altman-type Z-score model (and its variants) be suitable for predicting distress among private firms? Why or why not?
C. Why would a company pay to have its public debt rated by a major rating agency (such as Fitch's, Moody's or Standard & Poor's)? Why might an organisation decide not to have its debt rated?
D. Mesoblast Limited is an Australian-based regenerative medicine company, founded in 2004. It provides treatments for inflammatory ailments, cardiovascular disease and back pain. Using financial statement data of 2018 and 2019 (you can get data from text book pages 245- 246 or from DatAnalysis premium), compute the Altman Z-score value for Mesoblast for 2018 and 2019. Do you think the Altman Z-score works well for firms like Mesoblast? Why?