Manhattan Verbal foundation question

[sana.noor]

""The company's profits were outstanding, and it went bankrupt because of outrageously poor management,"

this question is from Manhattan foundation book and i know that its incorrect because of the use of and. But my question is about the use of IT. the firts half of the sentence says that its the company's profit not the company, so what IT is refering to?

[HenryE482]

Also, ran it to this and was confused by the explanation of the error as "and" when "but" was correct, is the "it" the issue? can someone explain this. Thanks

Chapter 4 pg 72 pop quiz in foundations of gmat verbal

[RonPurewal]

and is the problem.

there's no grammatical problem there, but the sentence with "and" is nonsense. the two pieces are in stark contrast: the company made huge profits BUT eventually went bankrupt.