(Answered) Question - dick smith versus jb hi-fidick smith one of the

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Question - Dick Smith versus JB Hi-Fi

Dick Smith, one of the leading Australian consumer electronics retailer went bankrupt in early 2016. In this exercise, you are required to compare the fundamental performance of Dick Smith with its close competitor JB Hi-Fi to gain insights into the drivers of Dick Smith's demise.

Required

1. Use Altman Z-score to determine the likelihoods of failure for both Dick Smith and JB Hi-Fi in 2014 and 2015. How does the Z-score perform in distinguishing these two companies?

2. Compute Piotroski's F-scores (described below) for both companies in 2014 and 2015. How did the F-score perform in distinguishing these two companies?

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