Reference no: EM131190409
Nintendo is a multi-national corporation which specializes in video games and toys. A legacy company often regarded as the "savior" of the video game industry with the debut of Super Mario Bros. in the 1980s, Nintendo has seen incredible highs and lows as their predictability ratio has always been relatively low as they've sought to innovate with hits and misses throughout their long-standing history. When considering Nintendo's viability to maintain itself and avoid financial failure through its z-score, one must first understand that a z-score under 1.8 is considered bad and would mark them as nearing the aforementioned point of inavoidable bankruptcy.
Working Capital/Total Assets: (8,691.93 - 826.46)/11,529.48 = 68.22%
Retained Earnings/Total Assets: 12,932.10/11,529.48 = 1.12%
EBIT/Total Assets: (-273.73 + 0)/11,529.48 = -0.024%
Market Value of Equity/Total Liabilities: 26,428.46/1,149.03 = 23%
Revenue/Total Assets: 4,055.30/11,529.48 = 0.35%
The above, when plugged into the calculation 1.2A + 1.4B + 3.3C + 0.6D + 1.0E = Z, as depicted by Jamie, results in a z-score of 16.46 for Nintendo. Despite its unpredictability, this number would infer that the company is still here to operate in the long-run. Given its nature as a long-term investment with a strong z-score, Nintendo is a reliable company for investors to consider when searching out a reliable stock. Being 14.66 points above the 1.8 z-score marking a potential downfall into negative financial territory, Nintendo is a corporation which can manage to keep itself afloat for a while, in spite of an erratic historic stock market performance.
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