Candela

Candela Corporation Case

Crystal S. Fitzwilliam

Axia College of University of Phoenix

Candela Corporation Inc for all July 3rd 2004, June 28th 2003 and June 2002 cash flow statement shows the breakdown of the company inflow and out flow for the 3 years. The operating activities show the net income and net loss for the 3 years. The investing shows the purchases made in 2002, 2003 and 2004. Lastly the activity of the financing for the company shows the increase and decrease of the long-term commitments in the company.

In 2002 the Candela Corporation had a cash flow from operations of 7,071,000. The cash flow shows that being greater than the net loss of 2,154,000. The net loss was due mostly to the increases of the accounts receivable of 3,525,000 and inventories of 1,661,000. There was a decrease in the account payables of 3,069,000. The purchase of new plant assets, repurchase of treasury stock and cash used in operation activities went to the decrease in the balance in cash and cash equivalents. The net loss was calculated using the accrual methods, in order to reach the company real cash flows. In the non cash expenses, which had to be recalculated and added. The additions were the loss from the discontinued operations and the interest of on stock warrants. The subtractions made were due to the deferred taxes and the foreign currency exchange rate difference.

In the working capital analysis showed the receivables, inventory and the tax payable increase by a significant dollar amount. The warranty costs, the payable and other assets decreased but at a smaller margin within the company. The working capital adjustment resulted in a gross outflow of cash which caused the cash outflow in the form of the operating activities. The investing activity shows the only item and that was the purchase of fixed assets which caused and outflow in terms of the investing activities. In the financing activities the overall which brought under control means of...