What was the net increase (decrease) in cash for Bombs Away?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
WAY FRANCHISING LLC STATEMENT OF CASHFLOWS FOR THE YEAR ENDED DECEMBER 31, 2023
| Net Income | $ (27,161) |
|---|---|
| Non-Cash Adjustments | |
| Changes in Current Assets | (515) |
| Changes in Deferred Revenue | 15,000 |
| NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES | (12,676) |
| INVESTING ACTIVITIES | |
| NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES | - |
| FINANCING ACTIVITIES | |
| Owner's Contribution | (91,721) |
| Due to Related Party | 59,397 |
| NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES | (32,324) |
| NET INCREASE (DECREASE) IN CASH | (45,001 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, the net increase (decrease) in cash for the company was a decrease of $45,001. This figure represents the overall change in Bombs Away's cash position during the period being reported, which appears to be for the year 2023 based on other financial statement dates. This decrease reflects the net effect of all cash inflows and outflows from operating, investing, and financing activities.
Specifically, the statement of cash flows indicates that Bombs Away's cash at the beginning of the period was $50,000, and after accounting for the net decrease, the cash at the end of the period was $5,000. This means that Bombs Away used more cash than it generated during the year.
For a prospective franchisee, this information is crucial as it provides insight into the financial stability and cash management of Bombs Away. A significant decrease in cash could indicate potential challenges in managing expenses, generating revenue, or securing financing. It would be prudent for a potential franchisee to investigate the reasons behind this decrease and assess whether it poses a risk to the franchisor's ability to support its franchisees.