What was the net increase (decrease) in cash and cash equivalents for Craters & Freighters in 2023?
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 increase in cash and cash equivalents for the company in 2023 was $4,615,333. This figure represents the overall change in the company's cash position during the year, taking into account all cash inflows (increases) and cash outflows (decreases) from operating, investing, and financing activities.
For a prospective Craters & Freighters franchisee, this information provides insight into the financial health and cash management of the franchisor. A significant increase in cash and cash equivalents suggests that the company is generating positive cash flow and effectively managing its finances. This can be a positive indicator of the franchisor's stability and ability to support its franchisees.
It's important to note that while a large increase in cash is generally positive, it's essential to understand the sources of that cash. For example, the FDD shows that Craters & Freighters had $2,769,688 in net cash flows from financing activities due to Due to Shareholder. Reviewing the complete financial statements and notes, including the statement of cash flows, provides a more comprehensive understanding of the company's financial performance and the factors driving changes in its cash position. A potential franchisee should analyze these trends over several years to assess the franchisor's consistent financial performance.