A leading technology company, XYZ Solutions, is experiencing financial turbulence amidst increasing competition and declining...
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A leading technology company, XYZ Solutions, is experiencing financial turbulence amidst increasing competition and declining market share. The management of XYZ Solutions is concerned about the company's ability to continue operating as a going concern. As a financial analyst tasked with evaluating the company's financial statements for the fiscal year ending December 31, 2023, analyze the provided financial data to assess whether XYZ Solutions is likely to continue as a going concern in accordance with the Going Concern Principle.
Here are selected financial data for XYZ Solutions:
Total assets: $50,000,000
Total liabilities: $35,000,000
Total equity: $15,000,000
Net income for the year: $2,000,000
Cash and cash equivalents: $5,000,000
Accounts receivable: $10,000,000
Inventory: $15,000,000
Property, plant, and equipment: $20,000,000
Long-term debt: $25,000,000
Accounts payable: $7,000,000
Accrued expenses: $3,000,000
Revenue for the year: $30,000,000
Cost of goods sold: $12,000,000
Operating expenses: $8,000,000
Income tax expense: $1,500,000
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