Company X is a medium-sized manufacturing company that has been operating for the past five years....

   

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Company X is a medium-sized manufacturing company that has been operating for the past five years. The company produces electronic gadgets and has experienced steady growth during this period. To make informed financial decisions and assess their current financial health, Company X's management has provided you with the following financial data for the last fiscal year: Income Statement (in thousands of dollars): Revenue: $5,000 Cost of Goods Sold (COGS): $3,000 Gross Profit: $2,000 Operating Expenses: $1,200 Net Income: $800 Balance Sheet (in thousands of dollars): Total Assets: $4,000 Total Liabilities: $2,000 Shareholders' Equity: $2,000 Current Assets: $1,500 Current Liabilities: $1,000 Additional Information: Tasks: Company X is considering an investment project that requires an initial outlay of $500,000 and is expected to generate annual cash flows of $150,000 for five years. The company's cost of capital is 10%. Tasks: 1. Financial Statement Analysis (5 points): Calculate the following financial ratios for Company X: Current Ratio Debt-to-Equity Ratio Profit Margin 2. Net Present Value (NPV) Analysis (5 points): Calculate the NPV of the proposed investment project. Determine whether it is financially viable for Company X. 3. Risk Assessment (5 points): Discuss the potential risks associated with the investment project. considering factors such as market volatility and competition. How should Company X address these risks in its decision-making process? 4. Strengths and Weaknesses (5 points): Identify and explain two financial strengths and two weaknesses of Company X based on the provided financial data. Please answer these questions thoroughly, showing your calculations where applicable, and provide clear explanations for your answers. Use your knowledge of financial analysis concepts and tools to analyze the financial health of Company X and provide recommendations regarding the investmen Company X is a medium-sized manufacturing company that has been operating for the past five years. The company produces electronic gadgets and has experienced steady growth during this period. To make informed financial decisions and assess their current financial health, Company X's management has provided you with the following financial data for the last fiscal year: Income Statement (in thousands of dollars): Revenue: $5,000 Cost of Goods Sold (COGS): $3,000 Gross Profit: $2,000 Operating Expenses: $1,200 Net Income: $800 Balance Sheet (in thousands of dollars): Total Assets: $4,000 Total Liabilities: $2,000 Shareholders' Equity: $2,000 Current Assets: $1,500 Current Liabilities: $1,000 Additional Information: Tasks: Company X is considering an investment project that requires an initial outlay of $500,000 and is expected to generate annual cash flows of $150,000 for five years. The company's cost of capital is 10%. Tasks: 1. Financial Statement Analysis (5 points): Calculate the following financial ratios for Company X: Current Ratio Debt-to-Equity Ratio Profit Margin 2. Net Present Value (NPV) Analysis (5 points): Calculate the NPV of the proposed investment project. Determine whether it is financially viable for Company X. 3. Risk Assessment (5 points): Discuss the potential risks associated with the investment project. considering factors such as market volatility and competition. How should Company X address these risks in its decision-making process? 4. Strengths and Weaknesses (5 points): Identify and explain two financial strengths and two weaknesses of Company X based on the provided financial data. Please answer these questions thoroughly, showing your calculations where applicable, and provide clear explanations for your answers. Use your knowledge of financial analysis concepts and tools to analyze the financial health of Company X and provide recommendations regarding the investmen