What was the net increase or decrease in cash for Crepe De Licious in 2022?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
| Cash flows from operating activities | |||
|---|---|---|---|
| Net income | $ 46,812 | $ 90,067 | |
| Adjustments to reconcile net income to net cash | |||
| provided by operating activities | |||
| Depreciation | 37,586 | 37,574 | |
| Credit losses | 21 | 10,800 | |
| Loss on disposal of property and equipment | 1,879 | - | |
| Deferred income taxes | (5,300) | (14,600) | |
| Changes in assets and liabilities | |||
| Accounts receivable | 20,321 | (41,576) | |
| Rebates receivable | (301) | (21,991) | |
| Inventory | 998 | (2,270) | |
| Prepaid expenses | 1,450 | (2,956) | |
| Operating leases | 6,464 | 13,386 | |
| Accounts payable | (12,805) | 29,032 | |
| Accrued expenses | (3,713) | 3,620 | |
| Deferred franchise fees | 40,000 | 7,667 | |
| Accrued income taxes | (11,100) | 12,100 | |
| Total adjustments | 75,500 | 30,786 | |
| Net cash provided by operating activities | 122,312 | 120,853 | |
| Cash flows from investing activities | |||
| Advances to shareholder | (7,905) | (25,000) | |
| Repayments from shareholder | 30,331 | 20,419 | |
| Advances to related parties | (43,868) | - | |
| Repayments from related parties | 5,425 | - | |
| Purchase of property and equipment | (7,082) | - | |
| Security deposit | (7,000) | - | |
| Net cash used in investing activities | (30,099) | (4,581) | |
| Cash flows from financing activities | |||
| Advances from related parties | 147,895 | (165,239) | |
| Repayments from related parties | (194,271) | 82,945 | |
| Net cash used in financing activities | (46,376) | (82,294) | |
| Net increase in cash | 45,837 | 33,978 | |
| Cash - beginning of year | 131,376 | 97,398 | |
| Cash - end of year | $ 177,213 | $ 131,376 |
Source: Item 23 — RECEIPTS (FDD pages 57–233)
What This Means (2025 FDD)
According to Crepe De Licious's 2025 Franchise Disclosure Document, the net increase in cash for the year ending December 31, 2022, was $33,978. This indicates that Crepe De Licious had a positive cash flow during that period, meaning its cash inflows exceeded its cash outflows. This figure is derived from the statement of cash flows, which reconciles net income to the actual cash generated or used by the company's operations, investments, and financing activities.
Specifically, the statement of cash flows details the various adjustments made to net income to arrive at the net cash provided by operating activities. These adjustments include depreciation, changes in assets and liabilities such as accounts receivable, rebates receivable, inventory, prepaid expenses, operating leases, accounts payable, accrued expenses, deferred franchise fees, and accrued income taxes. Additionally, the statement accounts for cash flows from investing activities, such as advances to and repayments from shareholders, and the purchase of property and equipment. Finally, it considers cash flows from financing activities, including advances from and repayments to related parties.
For a prospective Crepe De Licious franchisee, understanding the company's cash flow trends is crucial. A positive net increase in cash, as seen in 2022, can be a sign of financial health and stability. However, it's important to examine the components of the cash flow statement to determine the sources of cash and whether they are sustainable. For instance, a significant portion of the cash increase might be due to financing activities, which could indicate reliance on debt. Therefore, a franchisee should analyze the statement in detail and compare it with previous years to get a comprehensive view of Crepe De Licious's financial performance.
It is also important to note that the auditor, Brock, Schechter & Polakoff, LLP, has issued an unqualified opinion on the financial statements, indicating that they present fairly, in all material respects, the financial position of Crepe Delicious Holding USA, Inc. This provides additional assurance to potential franchisees regarding the reliability of the financial information presented in the FDD.