Does the audit opinion cover the cash flows of Chocolate Bash for the specified periods?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
We have audited the financial statements of CHOCOLATE BASH FRANCHISING LLC (the "Company"), which comprise the Balance Sheet as of December 31, 2023 & December 31, 2022 & December 31, 2021, the related Profit & Loss Statements, the related Statements of Cashflows, the related Statements of Shareholders' Equity, and the related notes for the twelve-month periods then ended. (collectively referred to as the "financial statements").
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 & December 31, 2022 & December 31, 2021, and the results of its operations and its cash flows for the twelve-month periods then ended in accordance with accounting principles generally accepted in the United States of America.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 38)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the independent accountant's audit report includes an opinion on the company's statements of cash flows. The audit specifically covers the statements of cash flows for the twelve-month periods ending December 31, 2023, December 31, 2022, and December 31, 2021. This indicates that the auditor has reviewed and expressed an opinion on the accuracy and fairness of the presentation of Chocolate Bash's cash flow statements for these years.
For a prospective franchisee, this is important because it provides an additional level of assurance regarding the financial statements' reliability. The audit opinion confirms that the cash flow statements, along with other financial statements, present fairly the financial position, results of operations, and cash flows of Chocolate Bash in accordance with accounting principles generally accepted in the United States of America.
The inclusion of the statement of cash flows in the audit scope is standard practice for franchise companies. A statement of cash flows provides insights into how Chocolate Bash generates and uses cash, which is crucial for assessing its financial health and stability. Franchisees can use this information to evaluate the franchisor's ability to support its franchisees and manage its own financial obligations.
Additionally, the FDD includes a table showing the statement of cash flows for the years 2021, 2022, and 2023. For 2023, Chocolate Bash had a net increase (decrease) in cash of ($37,658) with cash at the end of the period being $21,639. For 2022, Chocolate Bash had a net increase (decrease) in cash of ($45,628) with cash at the end of the period being $59,295. For 2021, Chocolate Bash had a net increase (decrease) in cash of $79,998 with cash at the end of the period being $104,922.