What was the net change in cash and cash equivalents for Crawlspace Medic in 2022?
Crawlspace_Medic Franchise · 2024 FDDAnswer from 2024 FDD Document
24 | $ | 216,112 | $ | 460,495 |
STATEMENTS OF CASH FLOWS CSM FRANCHISE GROUP, LLC
| 2023 | For the Years Ended December 31, 2022 | 2021 | |
|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Net income | $ 1,149,783 | $ 808,447 | $ 954,060 |
| Change in noncash rental assets and liability | (1,167) | - | - |
| Changes in operating assets and liabilities: | |||
| (Increase) decrease in franchisee fees receivable | (53,100) | 280,000 | (275,000) |
| Decrease in royalty fees receivable | - | 9,972 | 3,918 |
| (Increase) decrease in due from related parties | - | 9,599 | (9,599) |
| (Increase) decrease in prepaid expense | (21,437) | 6,918 | (12,168) |
| Increase (decrease) in accounts payable and | |||
| accrued expenses | 4,691 | (11,088) | 22,144 |
| Increase (decrease) in due to related party | 15,096 | (1,444) | (20,676) |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 1,093,866 | 1,102,404 | 662,679 |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Payment on related party financing | - | - | (21,460) |
| Member's withdrawals | (1,029,271) | (1,052,830) | (641,150) |
| NET CASH USED IN FINANCING ACTIVITIES | (1,029,271) | (1,052,830) | (662,610) |
| NET CHANGE IN CASH AND CASH EQUIVALENTS | 64,595 | 49,574 | 69 |
| Cash and cash equivalents at beginning of year | 22 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2024 FDD)
According to Crawlspace Medic's 2024 Franchise Disclosure Document, the net change in cash and cash equivalents for the company in 2022 was $49,574. This figure represents the overall increase in Crawlspace Medic's cash holdings after accounting for all cash inflows and outflows during the year. This metric is a key indicator of the company's financial health and its ability to manage its cash flow effectively.
Specifically, this net change is calculated by considering cash flows from operating activities, which amounted to $1,102,404, and cash flows from financing activities, which resulted in a usage of $1,052,830. The operating activities include net income of $808,447, adjustments for changes in operating assets and liabilities such as franchisee fees receivable ($280,000 increase), royalty fees receivable ($9,972 decrease), and accounts payable and accrued expenses ($11,088 decrease). Financing activities primarily consist of member's withdrawals, which totaled $1,052,830.
For a prospective Crawlspace Medic franchisee, understanding these cash flow dynamics is crucial. A positive net change in cash and cash equivalents suggests that the company is generating more cash than it is using, which can be a sign of stability and growth potential. However, it's also important to examine the components of these cash flows to understand the underlying drivers. For instance, a large portion of cash being used for member's withdrawals might raise questions about the company's reinvestment strategy. Therefore, potential franchisees should review these figures in the context of the company's overall financial performance and future plans.