Answer: Company A

## Explanation In the Altman Z-score model: - Z-score < 1.8 indicates high bankruptcy risk (distress zone) - Z-score between 1.8 and 3.0 indicates gray zone - Z-score > 3.0 indicates low bankruptcy risk (safe zone) **Analysis of each company:** - **Company A**: Current Z-score = 1.6 (below 1.8, in distress zone) and declining from 2.0 to 1.6 - **Company B**: Current Z-score = 2.4 (gray zone) but improving from 1.7 to 2.4 - **Company C**: Current Z-score = 3.2 (safe zone) and improving from 3.0 to 3.2 Company A has the lowest Z-score (1.6) which falls in the distress zone, indicating the highest probability of bankruptcy. Additionally, its Z-score is declining, further confirming financial deterioration.

Author: LeetQuiz Editorial Team