What was the amount of owner distributions for Bor Restoration in 2021?
Bor_Restoration Franchise · 2024 FDDAnswer from 2024 FDD Document
ative expenses | 592,756 | 263,246 | 108,423 | | Marketing expenses | 23,702 | 4 | 4,155 | | Total Operating Expenses | 834,562 | 520,649 | 251,820 | | NET INCOME | $ 386,160 | $ 420,082 | $ 291,217 |
| Beginning owners' equity | $ 304,641 | $ | 220,953 | $ 244,736 |
|---|---|---|---|---|
| Net contributions (distributions) | (52,004) | (336,394) | (315,000) | |
| Net income | 386,160 | 420,082 | 291,217 | |
| ENDING OWNERS' EQUITY | $ 638,797 | $ | 304,641 | $ 220,953 |
| 2022 | 2021 | 2020 | |||
|---|---|---|---|---|---|
| Cash flows from operating activities: | |||||
| Net income | $ | 386,160 | $ | 420,082 | $ 291,217 |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||
| Amortization | 2,738 | ||||
| Changes in operating assets and liabilities: | |||||
| Accounts receivable | (33,624) | (25,761) | (10,293) | ||
| Prepaid expenses | 117,025 | (119,713) | |||
| Other assets | (14,028) | (10,205) | (8,013) | ||
| Accounts payable |
Source: Item 23 — Receipts (FDD pages 40–202)
What This Means (2024 FDD)
According to Bor Restoration's 2024 Franchise Disclosure Document, the owner distributions for 2021 were $(586,394). This figure represents the cash outflow from the company to its owners during that year. Owner distributions are a common way for business owners to receive a return on their investment, but they also reduce the company's cash reserves.
For a prospective Bor Restoration franchisee, understanding owner distributions is crucial because it provides insight into how the company manages its finances and rewards its owners. A high level of distributions could indicate strong profitability, but it could also raise concerns about the company's ability to reinvest in growth or handle unexpected expenses. Conversely, low distributions might suggest financial constraints or a focus on reinvestment.
It's important to note that owner distributions are just one aspect of a company's financial health. A prospective franchisee should also consider other factors such as revenue, expenses, and debt levels to get a complete picture of Bor Restoration's financial performance. Reviewing the complete financial statements and consulting with a financial advisor is recommended to fully assess the implications of these distributions.