Example of bankruptcy-probability assessment for OJSC Megafon
Analysis result
Organization: OJSC Megafon Period: 01.01.2011 through 31.12.2011
As one indicator of the organization’s bankruptcy probability, the Altman Z-score is calculated below (a 4-factor model for private non-manufacturing companies is used for OJSC Megafon):
Z-score = 6.56·T1 + 3.26·T2 + 6.72·T3 + 1.05·T4, where
| Coefficient | Formula | Value at 31.12.2011 | Multiplier | Product (col. 3 × col. 4) |
|---|---|---|---|---|
| T1 | Working capital / Total assets | 0.18 | 6.56 | 1.18 |
| T2 | Retained earnings / Total assets | 0.72 | 3.26 | 2.33 |
| T3 | EBIT / Total assets | 0.16 | 6.72 | 1.1 |
| T4 | Equity / Debt | 2.6 | 1.05 | 2.73 |
Altman Z-score: 7.34
Estimated bankruptcy probability vs. Altman Z-score:
- 1.1 and below — high probability of bankruptcy;
- 1.1 to 2.6 — medium probability of bankruptcy;
- 2.6 and above — low probability of bankruptcy.
The Z-score for OJSC Megafon as of the last day of the analyzed period (31.12.2011) was 7.34. Such a value indicates a low probability of bankruptcy for OJSC Megafon.
Comments:
“Megafon” is now bankrupt
30.08.2011
Remember the story of how Megafon accidentally (through criminal negligence) leaked subscribers’ SMS messages onto the internet?
Our native arbitration court did not let that slide! There was a hearing! And our fairest-in-the-world court made an unprecedented ruling — Megafon will be ruined, and now all the telcos will make sure it never happens again, or else ruin and death await. For, the court said, customer data is sacrosanct!
The Moscow Arbitration Court held OJSC “Megafon” administratively liable for the online appearance of subscribers’ SMS texts and fined the company 30,000 rubles, RAPSI reports from the courtroom.
A strange arbitration court indeed. What’s 30,000 rubles? It could have ordered them to pay two candies. The lollipop kind.