What was the retained earnings for Carbones Pizzeria as of October 31, 2023?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
| Net income | $ 179,901 |
M&T PIZZA INCORPORATED AND SUBSIDIARIES Consolidated Statement of Changes in Stockholder's Equity For the Year Ended October 31, 2023
| Commo Shares | on Stock Amount | Common Stock nares Amount | Retained Earnings | Treasury stock | Total Equity | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance, October 31, 2022 | 2,500 | $ | 2,500 | $ 266,117 | $ | 707,489 | $ |
Source: Item 22 — CONTRACTS (FDD page 30)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the retained earnings as of October 31, 2023, was a negative amount of $34,556. This indicates an accumulated deficit rather than retained profits up to that point in time. This figure is part of the broader equity picture for the company. The balance sheet also shows common stock amount of $266,117 and net income of $887,390.
Retained earnings are the accumulated profits of a company after dividends have been paid to shareholders. A negative retained earnings balance, as in this case, can result from accumulated losses over time exceeding any profits. This can be a point of concern for potential investors or franchisees, as it may reflect financial challenges or past losses within the company. However, it is important to consider this figure in the context of the company's overall financial health and recent performance.
A prospective Carbones Pizzeria franchisee should investigate the reasons behind the negative retained earnings. Understanding whether this is due to historical factors, recent investments, or other specific circumstances is crucial. Reviewing the company's financial statements for subsequent years to see if the retained earnings have improved would also be prudent. It is also important to consider the overall trend of profitability and how the company is addressing any past financial difficulties.
In the franchise industry, it is not uncommon for newer or rapidly expanding franchisors to have fluctuating retained earnings. However, consistent profitability and a clear strategy for long-term financial health are important indicators of a stable franchise system. A potential franchisee should seek clarification from Carbones Pizzeria regarding their plans to improve retained earnings and ensure sustainable financial performance.