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    Infosys: Z 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + l.0X5

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    Ameti Srinidhi

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    Infosys: Z 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + l.0X5

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    Infosys: Z 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + l.0X5

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    Ameti Srinidhi

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    Infosys

    Banking Management
    ALTMAN Z-SCORE - Altman’s Z-Score model is a numerical measurement that is used to predict the chances of a business going bankrupt in the next
    two years. The model was developed by American finance professor
    EdwardAltman in 1968 as a measure of the financial stability of companies

    Z = 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + l.0X5


    X1 = working capital/total assets (%)
    X2 = retained earnings/total assets (%)
    X3 = EBIT/total assets (%)
    X4 = market value of equity/book value of debt (%)
    X5 = sales/total assets (times)

    CALCULATIONS:

    X1

    YEAR CURRENT ASSESTS CURRENT LIABILITIES WORKING CAPITAL TOTAL ASSESTS WC/TA
    2020 12,600.37 12,010.27 590.1 74,137.75 0.007959508
    2021 10,719.56 9,257.85 1461.71 62,177.11 0.023508812
    2022 11,507.79 8,959.29 2548.5 62,636.22 0.040687321
    2023 8,638.23 6,724.36 1913.87 54,700.16 0.03498838
    2024 8,309.37 7,569.29 740.08 49,578.94 0.014927306

    X2

    YEAR RETAINED EARNINGS TOTAL ASSETS RE/TA


    2020 51,981.79 74,137.75 0.701151438
    2021 46,726.01 62,177.11 0.751498582
    2022 48,413.30 62,636.22 0.772928188
    2023 42,759.53 54,700.16 0.781707585
    2024 37,507.37 49,578.94 0.756518191

    X3

    YEAR OPERATING PROFIT Depreciation and EBIT(OP+DEP) TOTAL ASSETS EBIT/TA


    Amortisation Expenses

    2020 25,847.33 1215.06 27062.39 74,137.75 0.365028477


    2021 26,576.07 1097.29 27673.36 62,177.11 0.445073115
    2022 20,632.93 913.96 21546.89 62,636.22 0.344000484
    2023 12,206.95 828.17 13035.12 54,700.16 0.238301314
    2024 15,856.41 813.51 16669.92 49,578.94 0.336229859

    X4

    BOOK VALUE OF MKT OF


    YEAR 0UTSTANDING SHARES SHARE PRICE MKT of EQUITY TOTAL ASSETS TOTAL LIABILITIES BOOK EQUITY DEBT BV OF DEBT IN CR. EQ/BV OF DB
    2020 2,02,22,023 927.85 18763004040.55 74,137.75 10,357.18 63780.57 10357.18 103571800000.00 0.181159389
    2021 2,02,12,022 1622.25 32788952689.50 62,177.11 8,870.41 53306.7 8870.41 88704100000.00 0.369644162
    2022 2,02,02,021 1723.5 34818183193.50 62,636.22 9,994.47 52641.75 9994.47 99944700000.00 0.348374483
    2023 2,01,92,020 2134.8 43105924296.00 54,700.16 14,175.13 40525.03 14175.13 141751300000.00 0.304095442
    2024 2,01,82,019 2471.2 49873805352.80 49,578.94 6,596.96 42981.98 6596.96 65969600000.00 0.756011941

    X5

    YEAR TOTAL SALES TOTAL ASSETS TS/TA


    2020 68,252 74,137.75 0.92061062
    2021 76,404 62,177.11 1.228812339
    2022 95,701 62,636.22 1.527885942
    2023 1,17,627 54,700.16 2.150395904
    2024 1,30,978 49,578.94 2.641807187

    ALTMAN Z SCORE

    YEAR X1*1.2 X2*1.4 X3*3.3 X4*0.6 X5*1.0 ALTMAN Z SCORE


    2020 0.009551409 0.981612013 1.204593975 0.108695634 0.92061062 3.225063651
    2021 0.028210575 1.052098015 1.468741278 0.221786497 1.228812339 3.999648704
    2022 0.048824785 1.082099463 1.135201597 0.20902469 1.527885942 4.003036477
    2023 0.041986056 1.09439062 0.786394336 0.182457265 2.150395904 4.255624181
    2024 0.017912767 1.059125467 1.109558534 0.453607165 2.641807187 5.28201112

    DECISION RULE: YEAR Z SCORE DECISION

    2020 3.225063651 Firm is financially sound


    If Z>2.99,Firm is 2021 3.999648704 Firm is financially sound
    Financially sound.
    If Z<1.81,Firm is 2022 4.003036477 Firm is financially sound
    Financially Distressed or
    Bankrupt.
    2023 4.255624181 Firm is financially sound

    2024 5.28201112 Firm is financially sound

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