XYZ Corporation is a multinational company operating in various countries. As the newly appointed Chief Financial Officer

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Question:

XYZ Corporation is a multinational company operating in various countries. As the newly appointed Chief Financial Officer (CFO) of XYZ Corporation, you are tasked with analyzing the company's financial statements and preparing a comprehensive report for the board of directors. The company has provided you with the following information:

1. Income Statement for the Year Ended December 31, 2023:

Sales Revenue: $10,000,000
Cost of Goods Sold: $6,000,000
Gross Profit: $4,000,000
Operating Expenses: $2,500,000
Net Income: $1,500,000

2. Balance Sheet as of December 31, 2023:

Current Assets:
- Cash and Cash Equivalents: $500,000
- Accounts Receivable: $1,000,000
- Inventory: $1,500,000

Property, Plant, and Equipment (PPE):
- Land: $1,000,000
- Buildings: $2,000,000
- Machinery and Equipment: $3,000,000
- Accumulated Depreciation: $1,500,000

Current Liabilities:
- Accounts Payable: $800,000
- Short-term Debt: $1,200,000

Long-term Liabilities:
- Long-term Debt: $2,500,000

Shareholders' Equity:
- Common Stock: $1,000,000
- Retained Earnings: $2,000,000

3. Additional Information:

- The company paid dividends of $500,000 during the year.
- The income tax rate is 25%.
- XYZ Corporation had 1,000,000 common shares outstanding throughout the year.

Based on the provided information, please prepare a comprehensive report addressing the following points:

a) Calculate the following financial ratios for XYZ Corporation:
- Gross Profit Margin
- Operating Profit Margin
- Net Profit Margin
- Return on Assets (ROA)
- Return on Equity (ROE)
- Current Ratio
- Acid-Test (Quick) Ratio
- Debt-to-Equity Ratio
- Earnings per Share (EPS)

b) Analyze the company's financial performance and comment on its profitability, liquidity, and solvency.

c) Discuss any limitations or weaknesses you identify in the financial statements provided.

d) Provide recommendations for improving the company's financial position or performance, if applicable.

Take your time to work through the question, and let me know when you're ready to proceed or if you need any additional information!