Prabhu Enterprises seeks your help in classifying the credit applicants of the company into…

Prabhu Enterprises seeks your help in classifying the credit applicants of the company into 'good' and 'bad' categories. You believe that the two key ratios that are helpful in discriminating between the 'good' and 'bad' accounts are (i) the quick ratio [(Current assets-Inventories)/ Current liabilities], represented hereafter by the variable X and (ii) the earning power [Profit before interest and tax/Total assets], represented hereafter by the variable Y. The following data is given to you about 18 accounts, ten of which happen to be good and eight of which happen to be bad.

Estimate the discriminant function that best discriminates between the 'good' and the 'bad' applicants