Compute and Interpret the Z-score

Information from the balance sheet, income statement, and statement of cash flows for Nike follows. Refer to these financial statements to answer the requirements.

Note: Complete the entire question in Excel and format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places.

NIKE INC.
Consolidated Income Statements
	May 31,	May 31,
For Year Ended ($ millions)	2019	2018
Revenues	$41,117	$38,397
Cost of sales	21,643	20,441
Gross profit	19,474	17,956
Demand creation expense	5,753	5,577
Operating overhead expense	10,949	9,934
Total selling and administrative expense	16,702	11,511
Interest expense (income), net	49	54
Other (income) expense, net	(78)	66
Income before income taxes	2,801	6,325
Income tax expense	772	2,392
Net income	$2,029	$3,933

NIKE INC.
Consolidated Balance Sheets
	May 31,	May 31,
$ millions (except share price)	2019	2018
Current assets
Cash and equivalents	$4,466	$4,249
Short-term investments	197	996
Accounts receivable, net	4,272	3,498
Inventories	7,622	7,261
Prepaid expenses and other current assets	1,968	1,130
Total current assets	18,525	17,134
Property, plant and equipment, net	4,744	4,454
Identifiable intangible assets, net	283	285
Goodwill	154	154
Deferred income taxes and other assets	2,011	2,509
Total assets	$25,717	$24,536
Current liabilities
Current portion of long-term debt	$6	$6
Notes payable	9	336
Accounts payable	2,612	2,279
Accrued liabilities	5,010	3,269
Income taxes payable	229	150
Total current liabilities	7,866	6,040
Long-term debt	3,464	3,468
Deferred income taxes and other liabilities	3,347	3,216
Shareholders equity
Common stock at stated value:
Class A convertible315 and 329 shares outstanding	0	0
Class B1,253 and 1,272 shares outstanding	3	3
Capital in excess of stated value	9,163	8,384
Accumulated other comprehensive income (loss)	231	(92)
Retained earnings	1,643	3,517
Total shareholders equity	11,040	11,812
Total liabilities and shareholders equity	$25,717	$24,536
Shares outstanding	1,253	1,272
Company's closing stock price per share	$77.14	$71.80

(a) Compute and compare the Altman Z-scores for both years.

	Year	Z-score
	2018	Answer
	2019	Answer

Which of the following explain the trend in the Z-scores from 2018 to 2019? (Specify Yes or No for each statement.)

Nike improved its working capital by decreasing its current liabilities. AnswerYesNo

Nike decreased its liquidity due to an increase in retained earnings. AnswerYesNo

Nike improved its earnings before interest and taxes by increasing its total net sales. AnswerYesNo

The market value of Nike's equity improved over the year. AnswerYesNo

Please answer all parts of the question.