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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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