What was the cash at the beginning of the year for Chesters in 2022?
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 at the beginning of the year 2022 was $1,849,432. This figure is derived from the Statements of Cash Flows, which outlines the movement of cash both into and out of the company during the reported periods. Understanding the beginning cash balance is crucial for assessing the company's liquidity and overall financial health at the start of the year.
For a prospective Chesters franchisee, this number provides a baseline for evaluating the franchisor's financial stability. A healthy cash balance at the beginning of the year suggests that Chesters has sufficient resources to meet its short-term obligations and invest in growth opportunities. It also indicates the company's ability to support its franchisees through various programs and services.
However, it's important to consider this figure in conjunction with other financial metrics, such as net income, cash flow from operations, and total liabilities. A high beginning cash balance does not necessarily guarantee future success, as it can be influenced by various factors, including economic conditions and management decisions. Therefore, prospective franchisees should conduct a thorough analysis of Chesters's financial statements and consult with a financial advisor to make an informed investment decision.
Furthermore, the FDD also includes details on cash flow activities, such as operating, investing, and financing activities, which provide a more comprehensive view of how Chesters manages its cash resources. Reviewing these activities can help potential franchisees understand the company's cash management strategies and its ability to generate cash from its core business operations.