What is the purpose of the cash flows from financing activities section in All Team's financial statements?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
$ | 667,144 | $ | 787,144 |
ALL TEAM FRANCHISE CORPORATION STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023
| 2024 | 2023 | ||
|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Net income | $ (43,528) | $ 201,944 | |
| Adjustments to reconcile net income to net cash | |||
| provided by operating activities: | |||
| Allowance for credit losses | 6,000 | 5,501 | |
| Changes in account balances: | |||
| Accounts receivable - trade | 479,748 | 1,387,458 | |
| Prepaid expenses | (61,295) | (16,270) | |
| Advances | (434,801) | (605,008) | |
| Due from IRS | 49,780 | (49,780) | |
| Accounts payable-trade | (882) | 3,528 | |
| Accrued expenses | (107,077) | (45,671) | |
| Other funding liabilities | 213,416 | (326,541) | |
| Total Adjustments | 144,889 | 353,217 | |
| Total Cash Provided by Operating Activities | 101,361 | 555,161 | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Payments on note receivable - franchises | - | - | |
| Total Cash Provided by Investing Activities | - | - | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Proceeds from credit line payable | 9,972,228 | 15,371,492 | |
| Principal payments on credit line payable | (10,433,329) | (15,758,708) | |
| Principal payment on related party note | (24,606) | (30,000) | |
| Stockholder distributions | (2,261) | (16,373) | |
| Total Cash Used in Financing Activities | (487,968) | (433,589) | |
| NET IN |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 33)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the statements of cash flows include a section detailing cash flows from financing activities. This section outlines the movement of cash related to how the company is funded, including both inflows and outflows. For example, proceeds from credit lines payable show how much money All Team borrowed, while principal payments on those credit lines show how much debt was repaid.
For a prospective All Team franchisee, this section provides insight into how All Team manages its debt and equity. It shows how All Team obtains capital and returns it to its lenders and owners. Reviewing these figures over the reported years, 2023 and 2024, can reveal trends in All Team's financing strategies.
Specifically, in 2024, All Team had proceeds from a credit line payable of $9,972,228 and principal payments on the credit line payable of $(10,433,329). Principal payments on a related party note totaled $(24,606), and stockholder distributions were $(2,261). This resulted in total cash used in financing activities of $(487,968). In 2023, proceeds from a credit line payable were $15,371,492, while principal payments on the credit line payable were $(15,758,708). Principal payment on a related party note was $(30,000), and stockholder distributions totaled $(16,373). The total cash used in financing activities in 2023 was $(433,589).