What was the increase/decrease in deferred tax asset for Bb.Q Chicken in 2022?
Bb_Q_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
AINED DEFICIT - ending | (3,554,585) | (3,662,473) |
Consolidated Statements of Cash Flow December 31, 2023 and 2022
| 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 |
| Cash flows from investing activities: | ||
| Acquisition of new fixed assets | (611,641) | (1,169,150) |
| Acquisition of intangible asset | (9,350) | (38,251) |
| Increase/Decrease in investment | - | (1,600,000) |
| Increase/Decrease in loans to franchises | (230,916) | (185,927) |
| Increase/Decrease in loans to others | (11,103) | 29,483 |
| Increase/Decrease in security deposits | (10,708) | (36,015) |
| Increase/Decrease in right of assets | (5,128,467) | (3,642,797) |
| Net cash used in investing activities | (6,002,185) | (6,642,657) |
| Cash flows from financing activities: | ||
| Bank loan | (59,695) | 473,269 |
| Increase/Decrease in lease liabilities | 4,955,595 | 3,775,961 |
| Net cash provided by financing activities | 4,895,900 | 4,249,230 |
| Net increase(decrease) in cash | 550,063 | (1,767,732) |
| Cash, beginning of year | 1,449,277 | 3,217,009 |
| Cash, end of year | $ 1,999,340 | $ 1,449, |
Source: Item 23 — RECEIPTS (FDD pages 62–283)
What This Means (2025 FDD)
According to Bb.Q Chicken's 2025 Franchise Disclosure Document, the increase/decrease in deferred tax asset in 2022 was a decrease of $132,543. This figure is part of the adjustments made to reconcile net income (loss) to net cash used in operating activities. It reflects changes in the company's deferred tax assets, which are assets that result from overpayment or advance payment of taxes.
A decrease in deferred tax assets typically means that Bb.Q Chicken has either utilized previously recognized tax benefits or that the temporary differences creating these assets have diminished. For a franchisee, this line item is an indicator of how the company manages its tax liabilities and assets, which can impact its overall financial health. Understanding these deferred tax implications requires careful review, as they can be complex and influenced by various accounting and tax regulations.
Prospective franchisees should be aware that deferred tax assets are non-cash items, but they reflect real tax benefits that Bb.Q Chicken expects to realize in the future. Monitoring these figures over time can provide insights into the company's profitability and tax planning strategies. It is advisable for potential franchisees to seek professional financial advice to fully understand the implications of deferred tax assets and how they might affect the franchise's financial performance.