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.

Required Comment on Charles & Colvard’s cash flows. Do you see any indicators of potential liquidity problems?

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2008 2007 2006 Net cash provided by (used in) operating activities Net cash used in investing activities Net cash provided by (used in) financing activities Net change in cash and equivalents Cash and cash equivalents at beginning of year $ (937,703) $(4,938,229) $ (1,786,654) (336,980) (186,582) (261,468) (1,514,680) (333,202) (5,120,909) (1,461,265) (6,714,377) (7,240,765) 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