What is the comprehensive income related to net income (loss) for Bb.Q Chicken?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2023 | 2022 | ||
|---|---|---|---|
| Cash flows from operating activities: | |||
| Net Income (loss) | $ 107,888 | $ 94,548 | |
| Adjustment to reconcile net income (loss) to net cash | |||
| used in operating activities: | |||
| Depreciation & amortization | 368,402 | 233,324 | |
| Increase/Decrease in accounts receivable | (2,256,767) | (328,765) | |
| Increase/Decrease in inventories | (1,570,287) | (2,776,492) | |
| Increase/Decrease in prepaid expenses | 91,641 | 383,504 | |
| Increase/Decrease in interest receivable | (12,530) | (4,020) | |
| Increase/Decrease in due to parent | 5,174,292 | - | |
| Increase/Decrease in deferred tax asset | (97,335) | (132,543) | |
| Increase/Decrease in accounts payable | 1,496,963 | 2,442,936 | |
| Increase/Decrease in accrued expenses | 9,721 | (95,548) | |
| Increase/Decrease in taxes payable | 14,290 | 32,350 | |
| Increase/Decrease in royalty payable | (1,593,686) | 428,569 | |
| Increase/Decrease in interest payable | 92,000 | 92,000 | |
| Increase/Decrease in other current liabilities | (33,994) | 89,582 | |
| Increase/Decrease in unearned revenue | (134,250) | 166,250 | |
| Net cash provided by operating activities | 1,656,348 | 625,695 |
Source: Item 23 — RECEIPTS (FDD pages 62–283)
What This Means (2025 FDD)
According to Bb.Q Chicken's 2025 Franchise Disclosure Document, the net income (loss) and adjustments to reconcile net income (loss) to net cash used in operating activities are detailed in the cash flow statements. In 2023, Bb.Q Chicken had a net income (loss), but the specific amount is not provided in the excerpt. For 2022, the net income was $107,888, and for an earlier period, it was $94,548.
Adjustments to reconcile net income (loss) to net cash used in operating activities include depreciation & amortization ($368,402 in 2023 and $233,324 in 2022), changes in accounts receivable (a decrease of $2,256,767 in 2023 and $328,765 in 2022), changes in inventories (decreases of $1,570,287 in 2023 and $2,776,492 in 2022), and changes in prepaid expenses (an increase of $91,641 in 2023 and $383,504 in 2022). There are also adjustments for interest receivable, due to parent, deferred tax asset, accounts payable, accrued expenses, taxes payable, royalty payable, interest payable, other current liabilities, and unearned revenue.
These adjustments are crucial for understanding the true cash flow generated by Bb.Q Chicken's operations, as net income alone does not reflect the actual cash inflows and outflows. For instance, depreciation is a non-cash expense that reduces net income but does not involve an actual outflow of cash. Similarly, changes in working capital accounts like accounts receivable and inventory can significantly impact cash flow. A decrease in accounts receivable means that Bb.Q Chicken is collecting payments more quickly, which increases cash flow, while an increase in inventory means that Bb.Q Chicken is investing more in stock, which decreases cash flow.
Prospective franchisees should carefully review these cash flow statements to assess the financial health and stability of Bb.Q Chicken. Understanding the adjustments made to net income provides a more accurate picture of the company's ability to generate cash and meet its obligations. It is also important to compare these figures to industry benchmarks and to analyze trends over time to identify any potential risks or opportunities.