Analyzing the statement of cash flows Charles & Colvard is the world”s sole manufacturer of artificially created moissanite, a stone used in fine jewelry. The company”s condensed statement of cash flows for the years 2006-2008 follows.
|
2008 |
2007 |
2006 |
|
|
Net cash provided by (used in) operating activities |
$ (937,703) |
$(4,938,229) |
$ (1,786,654) |
|
Net cash used in investing activities |
(336,980) |
(261,468) |
(333,202) |
|
Net cash provided by (used in) financing activities |
(186,582) |
(1,514,680) |
(5,120,909) |
|
Net change in cash and equivalents |
(1,461,265) |
(6,714,377) |
(7,240,765) |
|
Cash and cash equivalents at beginning of year |
7,048,409 |
13,762,786 |
21,003,551 |
|
Cash and cash equivalents at end of year |
$5,587,144 |
$ 7,048,409 |
$13,762,786 |
Required
Comment on Charles & Colvard”s cash flows. Do you see any indicators of potential liquidity problems?