What was the amount of cash provided by operating activities for 1-800-GOT-JUNK? for the period ended May 31, 2024?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
For the period ended May 31, 2025 and 2024
May 31 May 31
Cash provided by (used in):
Operating: Net income for the period
$ 288,999 $ 266,526 Items not involving cash: Amortization 9,288 20,952 Deferred income tax expense 59,707 32,952 Current income tax expense 25,716
Interest accrued for due to related parties 303,956 178,974 Bad debt
145,077 Income taxes paid (292,897) (69,581)
394,769 574,900 Changes in non-cash operating items: Accounts receivables 1,907,548 10,838,454 Due from related parties (1,340,526) (444,834) Prepaid expenses 237,174 13,745 Short-term investment (1,044) (538) Accounts payable and accrued liabilities (3,290,212) (541,944) Payable to franchisees (1,059,187) (10,075,702) Deferred revenue (37,475) (78,096) Due to related parties 5,710,937 2,797,879 Deposits 50,000
Withholding tax payable 226,407 (11,710)
2,798,391 3,072,154
Source: Item 21 — Financial Statements (FDD page 56)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, the cash provided by operating activities for the period ended May 31, 2024, was $3,072,154. This figure is derived from the consolidated statement of cash flows, which outlines the inflows and outflows of cash for 1-800-GOT-JUNK?. The statement categorizes these cash flows into operating, investing, and financing activities. This provides a summary of the company's financial activities over the specified period.
The operating activities section begins with the net income for the period, which was $266,526. Adjustments are then made for items not involving cash, such as amortization ($20,952), deferred income tax expense ($32,952), current income tax expense having no value, interest accrued for due to related parties ($178,974), and bad debt ($145,077). These adjustments reconcile net income to the actual cash generated from operations. Further adjustments are made for changes in non-cash operating items, including accounts receivables ($10,838,454), due from related parties ($-444,834), prepaid expenses ($13,745), short-term investment ($-538), accounts payable and accrued liabilities ($-541,944), payable to franchisees ($-10,075,702), deferred revenue ($-78,096), due to related parties ($2,797,879), deposits having no value, and withholding tax payable ($-11,710).
For a prospective franchisee, understanding the cash flow from operating activities is crucial. It indicates 1-800-GOT-JUNK?'s ability to generate cash from its core business operations. A positive cash flow suggests that the company is financially healthy and capable of meeting its obligations and funding future growth. However, it is important to consider the various components that contribute to this figure, such as changes in accounts receivable and payable, as these can provide insights into the company's working capital management and overall financial stability. Reviewing these figures in comparison to previous years and industry benchmarks can offer a more comprehensive understanding of 1-800-GOT-JUNK?'s financial performance.