What was the net cash flow from investing activities for Craters & Freighters in 2022?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
| 5,413,239 | $ 5,414,139 |
Statements of Cash Flows
| Years Ended December 31, | 2023 | 2022 |
|---|---|---|
| Change in Cash and Cash Equivalents: | ||
| Cash Flows from Operating Activities: | ||
| Net Income | $ 2,633,230 $ | 2,437,747 |
| Adjustments to Reconcile Net Income to Net Cash and Cash Equivalents | ||
| From Operating Income: | ||
| Amortization Expense | 101,989 | 99,763 |
| Depreciation Expense | 26,134 | 21,995 |
| Gain on Sale of Fixed Assets | (15,729) | - |
| Gain on Sale of Marketable Securities | (841) | (3,643) |
| Bad Debt Expense | 10,000 | 24,928 |
| Non-Cash Lease Expense | 1,865 | 83,132 |
| Unrealized Holding (Gain) Loss on Marketable Securities | (97,174) | 69,301 |
| Reinvested Dividends | (13,827) | (13,279) |
| (Increase) Decrease in Assets: | ||
| Accounts Receivable | 138,330 | (159,098) |
| Prepaid Expenses and Deposits | (166,615) | 462 |
| (Decrease) Increase in Liabilities: | ||
| Accounts Payable | (179,894) | 225,116 |
| Accrued Bonus | (132,340) | 132,340 |
| Accrued Liabilities and Payables | 1,332 | (3,152) |
| Operating Lease Liability Change | - | (70,918) |
| Net Cash Flows from Operating Activities | 2,306,460 | 2,844,694 |
| Cash Flows from Investing Activities: | ||
| Investment in Software Development | (113,648) | (106,716) |
| Proceeds from Sale of Investments | 77,025 | 77,160 |
| Purchase of Investments | (71,427) | (71,880) |
| Due from Related Party | (163,077) | (16,876) |
| Note Receivable | (100,000) | (60,000) |
| Purchase of Property and Equipment | (89,688) | - |
| Net Cash Flows from Investing Activities | (460,815) | (178,312) |
| Cash Flows from Financing Activities: | ||
| Distributions to Shareholder | - | (4,945,919) |
| Due to Shareholder | 2,769,688 | - |
| Net Cash Flows from Financing Activities | 2,769,688 | (4,945,919) |
| Net Increase (Decrease) in Cash and Cash Equivalents | 4,615,333 | (2,279,537) |
| Cash and Cash Equivalents at Beginning of Year | 2,376,316 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the net cash flows from investing activities in 2022 were a negative $178,312. This indicates that Craters & Freighters used more cash for investments than they generated from them during that year. These investments included items such as software development, the sale and purchase of investments, amounts due from a related party, and notes receivable.
For a prospective franchisee, understanding these cash flow dynamics is crucial. Investing activities reflect how Craters & Freighters is using its capital to grow and sustain the business. A negative cash flow in this area isn't necessarily bad, especially if it's related to investments in software or equipment that are expected to drive future growth. However, it's important to consider the specifics of these investments and their potential returns.
It is also important to note that in 2022, Craters & Freighters had investment in software development of $106,716, proceeds from sale of investments of $77,160, purchase of investments of $71,880, due from related party of $16,876, and note receivable of $60,000. These activities provide insight into how Craters & Freighters manages its resources and invests in its future. A potential franchisee should discuss these investment strategies with Craters & Freighters to understand their long-term vision and how it might impact the franchise system.
Overall, while the net cash flow from investing activities was negative in 2022, it is important to evaluate the specific investments made and their potential impact on the company's future performance. This information, combined with other financial data, can help a prospective franchisee make an informed decision about investing in a Craters & Freighters franchise.