Does the Deer Solution Statement of Cash Flows include information about equity?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
Metwally CPA PLLC
CERTIFIED PUBLIC ACCOUNTANT
1312 Norwood Dr STE 100, Bedford, Texas 76022
Cell: 214-200-5434 (Mohamed Metwally) Mmetwally@metwallycpa.com
Independent Auditor's Report
To the Members of Deer Solution Franchising, LLC
Opinion
We have audited the accompanying financial statements of Deer Solution Franchising, LLC (the Company), which comprise the balance sheets as of December 31, 2024 and 2023 and the related statements of operations, members' equity (deficit), and cash flows for the years then ended, and the related notes to the financial statements.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Deer Solution Franchising, LLC as of December 31, 2024 and 2023 and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, the company's financial statements include a statement of members' equity. Specifically, the independent auditor's report indicates that the audited financial statements comprise the balance sheets, statements of operations, members' equity (deficit), and cash flows. This suggests that the Statement of Cash Flows is prepared in conjunction with a statement that details changes in the equity or deficit of the members of Deer Solution.
This inclusion of a statement of members' equity (or deficit) alongside the Statement of Cash Flows is a standard accounting practice. It provides a more complete picture of the company's financial health by showing how equity investments and distributions, as well as profits or losses, have affected the company's overall financial position. For a prospective franchisee, this means they can review not only the cash inflows and outflows but also how the ownership structure and profitability impact the equity of the company.
The auditor's report emphasizes that these financial statements present fairly the financial position, results of operations, and cash flows of Deer Solution in accordance with generally accepted accounting principles (GAAP). This provides a level of assurance that the financial information is reliable and has been prepared using consistent and recognized accounting standards. Therefore, potential franchisees can have some confidence in the accuracy and completeness of the financial information provided.
It is important for prospective franchisees to carefully review both the Statement of Cash Flows and the statement of members' equity (deficit), along with the accompanying notes, to gain a thorough understanding of Deer Solution's financial performance and stability. Understanding the relationship between cash flow, profitability, and equity can help franchisees assess the financial risks and opportunities associated with investing in a Deer Solution franchise.