Question 1 The “Question 1” tab of the spreadsheet contains the most recent (“Year 0”) income statement for Thestral Corporation. You’ll need to forecast the next 5 years of the income statement...

Question 1
The “Question 1” tab of the spreadsheet contains the most recent (“Year 0”) income statement for Thestral Corporation. You’ll need to forecast the next 5 years of the income statement (including the Free Cash Flow) using the following assumptions: •Sales will grow by 9% each year. •COGS and SG&A will be forecast using the percent of sales technique.• Depreciation will grow by 7% each year.• Interest expense will grow by 12% each year.• Thestral’s tax rate is 27%. • CapEx and Change in NWC will grow by 14% each year.
Question 2Compute the most recent value of the 10 ratios covered in my notes for Verizon (Ticker: VZ). Then compute the Altman Z-Score. You can use any financial website (I primarily use Yahoo Finance, but feel free to explore other sites).
(Note: because this is a real company, it’s not always simple to find each item. You may want to use google, the class message boards, etc. as you work on this.)



Question 1 Thestral Corporation Year 0Year 1Year 2Year 3Year 4Year 5 Sales$ 25,000,000 Cost of Goods Sold$ 11,000,000 Gross Profit Selling, General and Administrative Costs$ 4,500,000 Depreciation$ 1,000,000 Earnings Before Interest and Tax (EBIT) Interest Expense$ 600,000 Earnings Before Tax Taxes (27%) Net Income Operating Cash Flow CapEx$ 2,900,000 Change in NWC$ 1,800,000 Free Cash Flow Question 2 Verizon Liquidity Ratios Current Ratio Quick Ratio Leverage Ratios Total Debt Ratio Debt to Equity Ratio Coverage Ratios Times Interest Earned Cash Coverage Ratio Profitability Ratios Profit Margin Return on Assets Return on Equity Market Value Ratio Price/Earnings Ratio Altman Z-Score X1 X2 X3 X4 X5 Altman Z-Score What's the interpretation of the Z-Score?