Essay about Candela Corporation Case
June 5, 2011
Axia College of University of Phoenix
A $ 2,154,000 net loss was occurred by the Candela Corporation. The accruals method was used to calculate the figure. The non-cash expenses were added back into the statement in order to obtain the proper cash flows. Notional interest on stock warrants and discounted operations were the additions that are the most important. In respect to the important additions there are also important subtractions as well and those subtractions are the currency exchange rate difference and deferred taxes. The working capital analysis showed that there was a significant increase in the inventory, receivables, and tax payables. …show more content…
The company had an increase in the number of shares issue and after that the company had increase in lines of credit and payment of long-term debt. Because the company’s share issue inflow was bigger, that leads to an inflow of cash of $ 176,000. As it pertains to the investing activities, the purchase of fixed assets was $ 169,000 more than the year before and that caused an outflow with the investing activities. All activities were positive except for the investing activities. That gave the company an increase in their cash reserves because of the $ 12,156,000 of positive net cash flow.
The Candela Corporation had a net profit of $ 8,119,000. The foreign exchange rate difference, discounted operations losses, a new provision for the discounted operations losses, and deferred taxes were the most important additions. The benefit on stock options was the most important subtractions. The working capital analysis showed that the