What was the net cash provided by operating activities for Clean Your Dirty Face in 2023?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
399,617 | $ | 470,036 | | |
Statements of Cash Flows For the Years Ended December 31, 2024 and 2023
| 2024 | 2023 | |||
|---|---|---|---|---|
| Cash Flows from Operating Activities | ||||
| Net Income | $ 607,813 | $ | 531,500 | |
| Adjustments to reconcile net income | ||||
| to net cash provided (used) by operating activities: | ||||
| (Increase) decrease in operating assets: | ||||
| Accounts receivable | (234) | (8,706) | ||
| Member contributions receivable | (300,000) | - | ||
| Overpayment of credit card | (9,829) | - | ||
| Increase (decrease) in operating liabilities: | ||||
| Accounts payable | - | (1,440) | ||
| Credit cards payable | (2,174) | 1,487 | ||
| Accrued expenses | 3,865 | (6,877) | ||
| Deferred revenue | (150,000) | (250,000) | ||
| Net Cash Provided (Used) by Operating Activities | 149,441 | 265,964 | ||
| Cash Flows from Investing Activities | ||||
| Purchase of money market securities | - | (1,276,253) | ||
| Sale of money market securities | 526,253 | - | ||
| Net Cash Provided (Used) by Investing Activities | 526,253 | (1,276,253) | ||
| Cash Flows from Financing Activities | ||||
| Member contributions | 340,000 | 1,004,952 | ||
| Member distributions | (1,018,232) | (640,000) | ||
| Net Cash Provided (Used) by Financing Activities | (678,232) | 364,952 | ||
| Net Increase (Decrease) in Cash and Cash Equivalents | (2,538) | (645,337) |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
According to Clean Your Dirty Face's 2025 Franchise Disclosure Document, the net cash provided by operating activities in 2023 was $265,964. This figure reflects the cash generated from the company's core business operations during that year. Net income for 2023 was $531,500. Several adjustments were made to reconcile net income to net cash provided by operating activities, including a decrease in accounts receivable of $8,706, a decrease in accounts payable of $1,440, an increase in credit cards payable of $1,487, a decrease in accrued expenses of $6,877, and a decrease in deferred revenue of $250,000.
For a prospective Clean Your Dirty Face franchisee, understanding the net cash provided by operating activities is crucial. It indicates the company's ability to generate cash from its ongoing operations, which can be used to fund future growth, pay debts, and provide returns to its members. A positive net cash flow from operating activities generally signifies a healthy and sustainable business model. The adjustments made to net income, such as changes in accounts receivable and deferred revenue, provide insights into the company's working capital management and revenue recognition practices.
It's important to note that while net cash provided by operating activities was positive in 2023, it decreased in 2024 to $149,441. This decrease could be due to various factors, such as changes in revenue, expenses, or working capital management. A potential franchisee should investigate the reasons behind this decrease to assess the company's financial performance and stability. Additionally, the FDD includes cash flows from investing and financing activities, which provide a more comprehensive view of the company's overall cash flow situation.
Overall, the net cash provided by operating activities is a key indicator of Clean Your Dirty Face's financial health and sustainability. Prospective franchisees should carefully analyze this figure, along with other financial statement data, to make an informed decision about investing in the franchise. Understanding the factors that influence cash flow from operations can help franchisees assess the potential risks and rewards of the franchise opportunity.