Page 8 - FINANCE PART 2 - 8. Businesses In Difficulty

BUSINESSES IN DIFFICULTY

Businesses in difficulty

• Several financial indicators were developed to predict

the chances of business failure. These include the:

• Z-score model

• K-score model

• A-score model

• Regarding these models, it is more important for you to

understand the various considerations and indicators of

problems, rather than calculating the scores using

these models.

• Note: Formulas will be provided if these scores have to

be calculated. (As indicated, other ratios and

calculations under Analysis and interpretation of

financial and non-financial information – will not be

provided.)

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