Do the Cinch I.T. financial statements include an income statement?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
The Company's policy is to prepare its financial statements on the accrual basis of accounting, consequently, certain revenues are recognized when earned rather than when cash is received, and certain expenses are recognized when the obligation is incurred rather than when the cash is disbursed.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Cinch Franchise LLC's ability to continue as a going concern within one year after the date that the financial statements are available to be issued.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 60)
What This Means (2024 FDD)
The 2024 Cinch I.T. Franchise Disclosure Document does not explicitly state whether the financial statements include an income statement. However, it does mention that Cinch I.T.'s policy is to prepare its financial statements on the accrual basis of accounting, where revenues are recognized when earned and expenses are recognized when the obligation is incurred.
Additionally, the FDD refers to the auditor's responsibility to provide reasonable assurance that the financial statements are free from material misstatement. It also mentions that management is required to evaluate conditions or events that could raise substantial doubt about Cinch I.T.'s ability to continue as a going concern. These statements suggest that comprehensive financial statements are prepared.
While the excerpts discuss the basis of accounting, use of estimates, cash handling, and receivables, they do not confirm the inclusion of an income statement. A prospective franchisee should verify with Cinch I.T. whether their financial statements include an income statement to fully understand the financial health of the company.