Accounting

Candela Corporation

Question 1

Before analyzing the cash flow statements for the three years of Candela Corporation , it is necessary to understand the current operations of the company . As described in the text , Candela , since is formation , is introducing new state-of-the-art medical application and because of their continual innovation , they have to capture significant market share , thus , we assume that by each year , the financials of the company are also going to improve

In 2004 , Candela managed to gain significant net gains , as the cash inflows were much higher than

the cash outflows . The reason being is that , during this year , the company got much higher returns from the investing activities . The year 2003 , also had a relatively good cash inflow , considering the amount of investment in the year . In 2003 , the cash inflows were the highest from the operating and investing activities , but the cash inflow from the financing activities were small . The year 2002 , didn 't perform well net income is concerned . The year ending loss was recorded , as all the three categories showed cash outflows . Despite , having a Net loss in 2002 , Candela quite successfully managed to get profits in year 2003 and 2004

Question 2

The Cash flow statements basically help in determine the cash receipts and cash disbursements of company . It gives a general idea of how the company is spending its cash and from where it is receiving it . With the help of cash flow statements , the company can find out the cash which...