What was the change in cash and restricted cash for Caring Transitions in the earliest year presented?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
| Adjustment to reconcile net income to net cash | |||
|---|---|---|---|
| provided by operating activities: | |||
| Depreciation | 114,120 | 109,265 | 78,898 |
| Non-cash lease expense | 5,721 | (944) | 1,350 |
| Net change in assets and liabilities: | |||
| Accounts receivable | (173,605) | (143,068) | 4,928 |
| Other receivable | - | 6,463 | (6,463) |
| Deposit - payroll | - | - | 30,396 |
| Franchise contract asset | (85,147) | (68,345) | (25,712) |
| Accounts payable | (7,503) | 29,975 | 54,536 |
| Unearned revenue | 354,190 | (199,510) | 279,820 |
| Franchise contract liability | 336,556 | 244,898 | 144,805 |
| Accrued expenses | (38,412) | (3,203) | 139,062 |
| Net cash provided by operating activities | 3,226,193 | 2,304,605 | 1,719,143 |
| Cash flows from investing activities | |||
| Property and equipment purchased | (294,719) | (300,360) | (401,836) |
| Net cash used by investing activities | (294,719) | (300,360) | (401,836) |
| Cash flows from financing activities | |||
| Repayment of notes payable | (32,159) | (31,209) | (30,282) |
| Distributions | (1,705,000) | (1,947,499) | (1,092,501) |
| Net cash used by financing activities | (1,737,159) | (1,978,708) | (1,122,783) |
| Change in cash and restricted cash | 1,194,315 | 25,537 | 194,524 |
| Cash and restricted cash at beginning of year | 1,120,470 | 1,094,933 | 900,409 |
| Cash and restricted cash at end of year | $ 2,314,785 | 1,120,470 | 1,094,933 |
Source: Item 23 — RECEIPT (FDD pages 49–202)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, the change in cash and restricted cash for the earliest year presented, which is 2022, was $194,524. This indicates the net increase in the company's combined cash and restricted cash holdings during that year.
Cash flow is a critical indicator of a company's financial health. A positive change in cash and restricted cash suggests that Caring Transitions generated more cash than it used during the year. This could be due to profitable operations, investments, or financing activities.
For a prospective franchisee, this information is useful for understanding the financial trends of Caring Transitions. While a single year's data provides a snapshot, reviewing this figure over multiple years (as presented in the FDD) can reveal whether the company's cash position is consistently improving or fluctuating. It is important to consider the factors that contributed to this change, such as operational performance and investment activities, to gain a comprehensive understanding of the company's financial management.
It is also important to note that 'restricted cash' may be subject to certain limitations or contractual obligations, so it may not be as readily available for use as unrestricted cash. A prospective franchisee should seek clarification from Caring Transitions regarding the nature and implications of any restricted cash holdings.