What was the net cash used in operating activities for Afuri Ramen Dumpling?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
| ACCUMULATED DEFICIT, end of year | $ | (14,524) | $ | (29,243) |
| 2021 2020 | 2020 | |||
|---|---|---|---|---|
| CASH FLOWS FROM OPERATIONS | 7.7 | 100000 | ||
| Net income (loss) | $ | 14,719 | $ | (14,076) |
| Adjustments to reconcile net loss to net cash flows | ||||
| provided by operating activities | ||||
| Depreciation | 1,506 | 376 | ||
| Capital contributions | 98,000 | |||
| Changes in operating assets and liabilities: | ||||
| Accounts receivable | (26,442) | 631 | ||
| Prepaid expenses | 5,236 | (9,720) | ||
| Unbilled receivables | 21,283 | |||
| Accounts payable | (14,890) | 11,057 | ||
| Credit cards payable | (1,628) | (27,288) | ||
| Due to franchisees, gift cards | 6,828 | 1,165 | ||
| Deferred revenue | 198,561 | (30,654) | ||
| Net cash provided by operating activities | 183,890 | = | 50,774 | |
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||
| Purchases of property and equipment | 1 4 | 820 | ||
| Purchase of intangible asset | (25,956) | (24,540) | ||
| Net cash used by financing activities | (25,956) | (23,720) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||
| Proceeds and collections from parent | 679,652 | 100 | ||
| Advances and repayments to parent | (298,571) | (318,321) | ||
| Payments on note payable to related party | (80,000) | 13.1-1-00-0 | ||
| 7 - 7 - 7 - 7 - 7 - 7 - 7 - 7 - 7 - 7 - | - | 301,081 | (318,321) | |
| NET CHANGE IN CASH AND CASH EQUIVALENTS | 459,015 | (291,267) | ||
| CASH AND CASH EQUIVALENTS, beginning of year | 467,067 | _ | 758,334 | |
| CASH AND CASH EQUIVALENTS, end of year | $ | 926,082 | $ | 467,067 |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORM | MATIO |
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to Afuri Ramen Dumpling's 2024 Franchise Disclosure Document, the provided financial statements show the net cash provided by operating activities, not the net cash used. In 2020, Afuri Ramen Dumpling had net cash provided by operating activities of $50,774. In 2021, the net cash provided by operating activities totaled $183,890.
It is important to note that these figures reflect the cash flow from operating activities at the corporate level, Afuri Franchise, Inc., and not necessarily the performance of individual franchise locations. These numbers are derived by adjusting net income (or loss) for non-cash items like depreciation and changes in various asset and liability accounts such as accounts receivable, prepaid expenses, accounts payable, credit cards payable, amounts due to franchisees, and deferred revenue.
A prospective franchisee should focus on the 'net cash provided by operating activities' to understand the company's ability to generate cash from its core business operations. This is a key indicator of financial health and sustainability. However, it is essential for potential franchisees to request and review the financial performance of existing franchise locations to gain a clearer picture of what they might expect in their own operations. Reviewing Item 19 in the FDD, if available, would also provide more clarity on potential franchisee revenues, costs, and profits.