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ACC 230 Week 6: Assignment: Candela Corporation Case

An accounting case study focusing on Candela Corporation.

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    ACC 230 Week 6: Assignment: Candela Corporation Case ACC 230 WEEK 6 Assignment: 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 format responding to questions 1 and 2 of the Candela Corporation Case on p. 146 (Ch. 4). · Post your paper as a Microsoft® Word attachment. Cash flow analysis of Candela Corporation Abstract The purpose of the paper is to analyze the cash flow statement of Candela Corporation for the year ended 2004, 2003 and 2002. Cash flows from all three activities such as operating, investing and financing has been summarized and analyzed. Then it has also been discussed that some of the item which can not be calculated directly from income statement and balance sheet. Introduction Cash flow statement is one of the four financial statements. It is the most important financial statements in all. It shows the form where the cash has come in and where the cash has gone out. Cash flows are categorized in three major categories; they are operating activities, investing activities and financing activities. Operating activities are related to normal business activity of the company. It shows from where the cash has been received and where it has been paid. In this category, the major sources of receipt or inflows is from customer in form of revenues and the major sources of payments are to supplier, employees and other expenses related to operation such as utilities, rent etc. The difference between cash inflows or receipts and cash outflows or payments or disbursement is known as net cash flow. If receipt exceeds it is called net cash generated from operating activities and if vice versa, 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 some other company in the form of shares or direct investment. When new fixed asset or some other investment is bought it is called cash outflow and when the old investment is sold it is called cash inflows from investing activities. Net cash flow provided by investing activities is used when receipts exceed payments and if payments exceed receipt it is called cash used for investing activities.

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