What was the cash balance at the beginning of 2023 for Chesters?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
,834 |
CHESTER'S INTERNATIONAL, LLC STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
| 2023 | 2022 | |
|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Net income | $ 2,582,783 | $ 2,693,133 |
| Adjustments to reconcile net income to net cash | ||
| provided by operating activities: | ||
| Loss on disposal of fixed assets | - | 12,167 |
| Amortization and depreciation | 462,783 | 503,875 |
| Amortization of operating lease right-of-use assets | 387,265 | 390,480 |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | (1,563,980) | (86,568) |
| Due from related parties | (433,495) | (592,834) |
| Inventories | (116,596) | (155,319) |
| Prepaid expenses | 51,385 | (8,823) |
| Accounts payable | 2,184,712 | (161,039) |
| Accrued liabilities | (79,688) | 182,979 |
| Customer deposits | 75,943 | (310,912) |
| Operating lease liabilities | (364,784) | (390,480) |
| Unearned franchise fees | (88,400) | (30,600) |
| Net cash provided by operating activities: | 3,097,928 | 2,046,059 |
| CASH FLOWS FROM INVESTING ACTIVITIES | ||
| Purchases of equipment | (360,666) | (82,235) |
| Purchases of intangibles | (68,566) | (181,396) |
| Net cash used in investing activities | (429,232) | (263,631) |
| CASH FLOWS FROM FINANCING ACTIVITIES | ||
| Repayment of long-term debt | (725,090) | (569,456) |
| Proceeds from long-term debt | - | 161,250 |
| Distribution to members | (1,820,272) | (831,314) |
| Net cash used in financing activities | (2,545,362) | (1,239,520) |
| INCREASE IN CASH | 123,334 | 542,908 |
| CASH AT BEGINNING OF YEAR | 2,392,340 | 1,849,432 |
| CASH AT END OF YEAR | $ 2,515,674 | $ 2,392,340 |
| SUPPLEMENTARY DISCLOSURE OF CASH | ||
| FLOWS INFORMATION: | ||
| Cash paid during the year for interest | $ 139,101 | $ 162,422 |
| Decrease to operating lease right-of-use assets | ||
| due to contract terminations | $ 846,599 | $ - |
| Additions to operating lease right-of-use assets | ||
| obtained from operating lease liabilities | $ 1,930,004 | $ 1,695,152 |
| Reduction of operating lease right-of-use assets |
Source: Item 21 — **FINANCIAL STATEMENTS (FDD page 48)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, the cash balance at the beginning of 2023 was $2,392,340. This figure is derived from the statement of cash flows for the years ended December 31, 2023 and 2022. The statement provides a summary of the cash inflows and outflows for Chesters during those years.
For a prospective franchisee, understanding the franchisor's cash flow is crucial. It offers insights into the financial stability and operational efficiency of Chesters. A healthy cash balance indicates that Chesters has sufficient liquid assets to meet its short-term obligations and invest in future growth.
However, it is important to consider this figure in conjunction with other financial metrics and information provided in the FDD. Analyzing trends in cash flow over multiple years, as well as understanding the sources and uses of cash, can provide a more comprehensive understanding of Chesters's financial health. Additionally, prospective franchisees should consult with a financial advisor to assess the implications of these figures for their investment decision.