Well, in October 04, I performed an Altman Test for Solvency on Ion and came up with a Z-score result of 1.692. The interpretation is as follows for the test score:
Z-SCORE ABOVE 3.0 -The company is safe based on these financial figures only.
Z-SCORE BETWEEN 2.7 and 2.99 - On Alert. This zone is an area where one should exercise caution.
Z-SCORE BETWEEN 1.8 and 2.7 - Good chances of the company going bankrupt within 2 years of operations from the date of financial figures given.
Z-SCORE BELOW 1.80- Probability of Financial embarassment is very high.
As the Z score for ION was 1.692, it indicated that the company was in financial distress (Probability of Financial Embarassment is very high).
I suggested to my broker that we should sell, but he reassured me that the company was ok. Well, a small loss for me now, but a good lesson learnt.
For those of you interested in this test, go to http://www.creditguru.com/CalcAltZ.shtml.
Well, in October 04, I performed an Altman Test for Solvency on...
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