What were the yearly changes in equity for Chocolate Bash in 2023?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
F DECEMBER 31, 2023 & DECEMBER 31, 2022 & DECEMBER 31, 2021
| Opening Equity Balance | Yearly Changes | Total | |
|---|---|---|---|
| Beginning Balance | $ (8,826) $ | - | $ (8,826) |
| Net Income for the period ending December 31, 2021 | - | 38,808 | 38,808 |
| Equity Contributions (Distributions) | - | 17,940 | 17,940 |
| Balance, December 31, 2021 | $ (8,826) | $ 5 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 38)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the yearly changes in equity for the period ending December 31, 2023, reflect several financial activities. The net income for this period was $15,483, indicating the company's profitability. However, equity contributions (or distributions) amounted to a negative $61,122, meaning that more money was distributed out of the company than contributed into it.
Overall, the total yearly change in equity for Chocolate Bash in 2023 was a negative $45,639. This figure is the sum of the net income and the equity contributions/distributions. The opening equity balance was $46,509, and after accounting for the yearly change, the balance at the end of December 31, 2023, was $872.
For a prospective franchisee, this data provides insight into the financial management and profitability of Chocolate Bash. While the company generated a net income, the significant distributions resulted in a substantial decrease in overall equity. This could be a point of discussion with the franchisor to understand the reasons behind these distributions and their potential impact on the company's financial stability and future growth.