ACC 230 Week 6: Assignment: Candela Corporation Case

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ACC 230 Week 6: Assignment: Candela Corporation CaseACC 230 WEEK 6Assignment: Candela Corporation Case· Resources: Ch. 4 of Understanding Financial Statements· Due Date: Day 7 [Individual forum]· Compose a 500-to 750-word paper in APA formatresponding to questions 1 and 2 ofthe CandelaCorporation Case on p. 146 (Ch. 4).· Post your paper as a Microsoft® Word attachment.Cash flow analysis of Candela CorporationAbstractThe purpose of the paper is to analyze the cash flow statement of Candela Corporation for the yearended 2004, 2003 and 2002. Cash flows from all three activities such as operating, investing andfinancing has been summarized and analyzed. Then it has also been discussed that some of the itemwhich can not be calculated directly from income statement and balance sheet.IntroductionCash flow statement is one of the four financial statements. It is the most important financialstatements in all. It shows the form where the cash has come in and where the cash has gone out. Cashflows are categorized in three major categories; they are operating activities, investing activities andfinancing activities. Operating activities are related to normal business activity of the company. Itshows from where the cash has been received and where it has been paid. In this category, the majorsources of receipt or inflows is from customer in form of revenues and the major sources of paymentsare to supplier, employees and other expenses related to operation such as utilities, rent etc. Thedifference between cash inflows or receipts and cash outflows or payments or disbursement is known asnet cash flow. If receipt exceeds it is called net cash generated from operating activities and if viceversa, it is called net cash used for operating activities.Cash flows from investing activities related to purchase and sell of fixed assets or investment in someother company in the form of shares or direct investment. When new fixed asset or some otherinvestment is bought it is called cash outflow and when the old investment is sold it is called cashinflows from investing activities. Net cash flow provided by investing activities is used when receiptsexceed payments and if payments exceed receipt it is called cash used for investing activities.

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