1) ABC Foods has working capital/total assets ratio of= 0.2, a retained earnings/ total assets ratio of= 0.1, earnings before interest and taxes / total assets ratio of= 0.25, market value of equity/book value of total liabilities ratio of= 0.6, and a sales/ total assets ratio of= 0.8. Determine and interpret company's Z score.
2) Firm A has 3 divisions which make revenues of= $1.3 billion, $2.5 billion, and $5.2 billion. Firm B is a competitor with 3 associated divisions which make $2 billion each. By using a Herfindahl Index to measure focus, find out if both Firm A and Firm B shareholders would see merger as the action which would increase or rather decrease focus.