Candela Corporation Analysis
Natasa Margraf-White
ACC/230
26 January 2014
Christopher Fountain
Candela Corporation Analysis
The analysis of the Candela Corporation from June 2002 until June 2004 is to determine trends that developed through yearly activity. This analysis looks to identify areas where cash funds were applied, to identify if the company is improving as the years progress, and where possible steps could be taken to reduce expenses. Additionally it will be observed if the company has the ability to meet financial obligations and is able to sustain its self without the need for outside funds such as long-term debts.
This analysis begins with the operations activity which involves items that are directly and indirectly involved with operations of the company itself. The first item that stands out for the company is the net income for the 02” which reflected a negative balance. It was the beginning of a high low pattern with accounts receivable and inventory, in which the company increase their inventory in 02” which was then reduced the following year only to increase nearly twice the amount of 02”. With accounts receivable the company approves consumer credit, and while the inventory is moving the company is not issuing as much credit the following year. Just as with inventory, the company’s accounts receivable doubles what was originally approved in 02”. The next area of significant change of the three year period occurred with accounts payable, reflecting a significant drop in 2002 indicating that the company had been able to pay down on lines of credit which they owed. The following year would show that only half of the previous year’s payment was made, with a tenth of that paid in the final year. Lastly is the tax payable account which a significant increase in 2003 as compared to the decreases experienced in the previous and following years.
The investments activities for the company represent the...