What were the net cash flows provided by (used in) operating activities for Deka Lash in 2/31/2021?
Deka_Lash Franchise · 2024 FDDAnswer from 2024 FDD Document
5 | 86,868 | | Interest income | | 06,704 | 1. | 618 | - 4 | | Employee retention credit income | | 811,828 | | - | | | Loss on disposal of fixed assets | | (15,000) | | - | - | | Interest expense | _ | - | | _ | (2,374) | | TOTAL OTHER INCOME (EXPENSE) | - | 862,951 | 85 | 163 | 84,494 | | NET INCOME | S | 220,255 | $ 225 | 549 | $ 717,454 |
| Balance at December 31, 2020 | $ (3,671,476) |
|---|---|
| Net income | 717,454 |
| Balance at December 31, 2021 | (2,954,022) |
| Net income | 225.549 |
| Balance at December 31, 2022 | (2,728.473) |
| Net income | 220,255 |
| Balance at December 31, 2023 | 5 (2,508,218) |
| 12 | 2/31/2023 | 2/31/2022 | 1 | 2/31/2021 | ||||
|---|---|---|---|---|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | Maria Agenta | |||||||
| Net income | 5 | 220,255 | 5 | 225,549 | $ | 717,454 | ||
| Adjustments to reconcile net income to net cash | ||||||||
| flows from operating activities: | ||||||||
| Depreciation | 17,948 | 13,439 | 19,608 | |||||
| Amortization | 18,000 | 13,556 | 1 | |||||
| Loss on disposal of property and equipment | 15,000 | - | 1 | |||||
| Allowance for notes receivable and doubtful accounts | 60,740 | - | ||||||
| Note receivable forgiveness | 71,469 | - | ||||||
| (Increase) decrease in operating assets: | ||||||||
| Accounts receivable | 445,348 | (295,995) | (239,322) | |||||
| Prepaid expense | 47,786 | 106,374 | (253,501) | |||||
| Inventory | 88,627 | 133,497 | (476,661) | |||||
| Deferred direct franchise costs | 473,893 | (78,089) | 65,581 | |||||
| Accrued interest - notes receivable | (5,259) | (1,618) | ||||||
| Deposits | 11,010 | (7,291) | (3,719) | |||||
| Increase (decrease) in operating liabilities: | ||||||||
| Accounts payable | 228,775 | 25,662 | (22,774) | |||||
| Accrued liabilities | (65,804) | 66,821 | 117,952 | |||||
| Deferred revenue | (61,584) | 66,092 | (28,768) | |||||
| Deferred initial franchise fee revenue | (1,079,797) | 122,394 | (264,725) | |||||
| Described initial statement for texture | _ | Arguerates | _ | 122,574 | - | (204,120) | ||
| NET CASH FLOWS PROVIDED BY (USED IN) | ||||||||
| OPERATING ACTIVITIES | 486,407 | 390,391 | (368,875) | |||||
| OFERATING SCHYIIIES | _ | 400,407 | _ | 390,331 | - | (300,013) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of property and equipment | (2.372) | (96,271) | (17,730) | |||||
| Proceeds from disposal of property and equipment | 18,854 | 100,277 | 1.121.500 | |||||
| Purchase of intangible asset | (2,750) | (2,025) | ||||||
| Capitalized software development costs | 12(150) | (10,000) | (44,000) | |||||
| Payments from notes receivable | 27,367 | (10,000) | [44,000) | |||||
| Issuance of notes receivable | (30,000) | (104,050) | ||||||
| Net change on notes receivable - related parties | (414,495) | (85,520) | 217,489 | |||||
| iver change on notes receivable - related parties | (4)4,492 | _ | (93,249) | 417,402 | ||||
| NET CASH FLOWS (USED IN) PROVIDED BY | ||||||||
| INVESTING ACTIVITIES | (403,396) | (297,866) | 155,759 | |||||
| EVILSTEND ACTIVITIES | - | (403,50) | - | (437,000) | - | 1202102 | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Net change on note payable - related parties | (68,048) | (231,837 |
Source: Item 23 — RECEIPT (FDD pages 63–234)
What This Means (2024 FDD)
According to Deka Lash's 2024 Franchise Disclosure Document, the net cash flows used in operating activities for the period ending February 31, 2021, were $(368,875). This indicates that Deka Lash's operating activities consumed more cash than they generated during that time. This figure is a key indicator of the company's financial health and its ability to fund its operations through its core business activities.
For a prospective franchisee, this information is crucial for assessing the financial stability and performance of Deka Lash. Negative cash flow from operations could signal potential challenges in the company's business model or operational efficiency. It's important to note that this is a snapshot in time, and the company's financial situation may have changed since then. However, it warrants further investigation into the reasons behind the negative cash flow and the strategies Deka Lash has in place to improve its financial performance.
It is important for potential franchisees to review the complete financial statements and consult with a financial advisor to fully understand the implications of this data. They should also inquire about Deka Lash's plans for future growth and profitability, and how these plans are expected to impact the company's cash flow from operations. Understanding the context behind these figures is essential for making an informed investment decision.