In the City Wide audit, what must be concluded regarding the company's ability to continue as a going concern?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
ents | 7 | | Supplementary Information | | | Consolidating Schedule – Balance Sheet 18 | | | Consolidating Schedule – Statement of Income (Loss) and Comprehensive Income (Loss) 19 | |
Independent Auditor's Report
Board of Directors City Wide Franchise Company, Inc. & Subsidiaries Lenexa, Kansas
Opinion
We have audited the consolidated financial statements of City Wide Franchise Company, Inc. & Subsidiaries ("the Company"), which comprise the consolidated balance sheets as of December 31, 2024, 2023, and 2022, and the related consolidated statements of income and comprehensive income, stockholders' equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, 2023, and 2022, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS).
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 65)
What This Means (2025 FDD)
According to the 2025 City Wide Franchise Disclosure Document, the independent auditor's report indicates a positive opinion on the company's financial statements. The auditor's opinion confirms that the financial statements present fairly, in all material respects, the financial position of City Wide as of December 31, 2024, 2023, and 2022, and the results of its operations and its cash flows for the years then ended, in accordance with accounting principles generally accepted in the United States of America. This suggests that the audit did not raise substantial doubt about City Wide's ability to continue as a going concern.
The auditor's responsibilities include concluding whether any conditions or events raise substantial doubt about City Wide's ability to continue as a going concern for a reasonable period. The fact that the auditor issued an unqualified opinion implies they did not identify such conditions or events. This is a positive indicator for prospective franchisees, as it suggests financial stability and the ability of City Wide to meet its obligations in the near future.
Furthermore, management is responsible for evaluating whether there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern within one year after the date that these consolidated financial statements are available to be issued. The independent auditor's report provides assurance that the financial statements are fairly presented, implying that management's assessment aligns with the auditor's opinion. This provides further confidence in City Wide's financial health and its prospects for continued operation.