What was the net increase or decrease in cash for Bor Restoration in 2022?
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 | 466 | (5,476) | 16 |
Source: Item 23 — Receipts (FDD pages 40–202)
What This Means (2024 FDD)
According to Bor Restoration's 2024 Franchise Disclosure Document, the net increase in cash for the company in 2022 was $309,518. This figure represents the overall change in Bor Restoration's cash position during the year, taking into account all cash inflows (increases) and cash outflows (decreases) from operating, financing, and investing activities. This indicates that Bor Restoration experienced a positive cash flow situation in 2022, increasing its liquid assets.
Specifically, this net increase is calculated by considering cash flows from operating activities, such as net income and adjustments for non-cash items, and cash flows from financing activities, like owner contributions and distributions. For Bor Restoration in 2022, the net cash provided by operating activities was $361,522, while the net cash used in financing activities was $52,004. The difference between these amounts results in the overall net increase in cash of $309,518.
For a prospective franchisee, understanding the net increase or decrease in cash is crucial as it reflects the financial health and stability of the franchisor. A positive net increase, as seen with Bor Restoration in 2022, generally suggests that the company is managing its cash effectively and has sufficient liquidity to cover its obligations and potentially invest in growth opportunities. This can be a reassuring sign for franchisees who rely on the franchisor's stability for support and brand development.
However, it is important to consider this figure in the context of Bor Restoration's overall financial performance and industry trends. A single year's positive cash flow does not guarantee future success, and franchisees should also review the company's balance sheets, income statements, and cash flow statements for multiple years to gain a comprehensive understanding of its financial position. Additionally, prospective franchisees should inquire about the factors that contributed to the increase in cash and whether these factors are sustainable in the long term.