What was the net cash used in investing activities for Afuri Ramen Dumpling?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
| Net income | $ | 8,159 |
|---|---|---|
| Adjustment to reconcile net income to net cash flows | ||
| provided by operating activities: | ||
| Depreciation | 1,679 | |
| Deferred income taxes | (24,000) | |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | 2,065 | |
| due from parent and affiliates | (68,488) | |
| Prepaid expenses | 3,881 | |
| Accounts payable | 56 | |
| Due to parent and affiliates | 142,480 | |
| Credit cards payable | 5,922 | |
| Gift card liabilities and other | 8,827 | |
| Income tax payable | 800 | |
| Deferred revenue | (64.867) | |
| Net cash provided by operating activities | 16,514 | |
| Cash flows from investing activities | ||
| Acquisition of property and equipment | (1,249) | |
| Purchase of intangible assets | (2,496) | |
| Net cash used in investing activities | 18 | (3,745) |
| Net change in cash |
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, the net cash used in investing activities in 2021 was ($3,745) and in 2020 was ($9,233). This indicates that Afuri Ramen Dumpling spent more cash than it generated from its investing activities during these periods.
For a prospective franchisee, this information is crucial for understanding how Afuri Ramen Dumpling manages its capital. The figures suggest that the company has been investing in assets like property, equipment, and intangible assets, which require cash outflows. These investments could be related to supporting new franchise locations or improving existing operations.
It's important to note that negative cash flow from investing activities isn't necessarily a negative sign. It often indicates a company is investing in its future growth. However, a potential franchisee should investigate what specific investments Afuri Ramen Dumpling is making and how these investments are expected to benefit franchisees. Understanding the company's investment strategy can provide insights into its long-term plans and financial stability.