What was the net cash used by operating activities for Dermani Medspa?
Dermani_Medspa Franchise · 2025 FDDAnswer from 2025 FDD Document
| Revenue | |
|---|---|
| Franchise | $ 56,167 |
| sales | |
| Royalty | 444,406 |
| fees | |
| Technology | 36,600 |
| fees | |
| Training | 212,942 |
| fees | |
| System | 45,222 |
| marketing | |
| fees | |
| Total | 795,337 |
| revenue | |
| General | |
| and | |
| Administrative | |
| Expenses | |
| Computer, | 35,852 |
| software | |
| and | |
| internet | |
| expense | |
| Depreciation | 7,621 |
| expense | |
| Legal | 84,830 |
| and | |
| professional | |
| services | |
| Meals, | 33,769 |
| entertainment | |
| and | |
| travel | |
| Merchant | 5,418 |
| processing | |
| fees | |
| Payroll | 208,970 |
| and | |
| benefits | |
| Health | 2,240 |
| benefits | |
| Phone | 6,570 |
| and | |
| utilities | |
| Rent | 64,523 |
| expense | |
| Repairs | 2,914 |
| and | |
| maintenance | |
| Spa | 1,582 |
| supplies | |
| Training | 102,200 |
| expense | |
| Other | 2,314 |
| general | |
| and | |
| administrative | |
| expenses | |
| Total | 558,803 |
Source: Item 23 — RECEIPTS (FDD pages 66–311)
What This Means (2025 FDD)
According to Dermani Medspa's 2025 Franchise Disclosure Document, the net cash from operating activities as of December 31, 2023, was $283,560. This figure represents the cash Dermani Medspa generated from its core business operations during the specified period. It's a key indicator of the company's financial health, showing its ability to generate cash from its day-to-day activities.
The FDD also provides a breakdown of how this net cash flow was derived. The net income was $43,922, with adjustments made for non-cash items and changes in working capital accounts. These adjustments include depreciation expense ($7,621), changes in accounts receivable ($2,852), prepaid expenses ($490,743), operating lease right of use asset ($37,113), accrued liabilities ($39,162), unearned revenue ($677,533), and operating lease liability ($33,900). These adjustments reconcile net income to the actual cash generated from operations.
For a prospective franchisee, understanding these cash flow dynamics is crucial. A positive net cash flow from operating activities suggests that Dermani Medspa is effectively managing its business and generating sufficient cash to cover its operating expenses. However, it's important to analyze the individual components of the cash flow statement to identify any potential areas of concern. For example, a significant increase in accounts receivable could indicate that the company is having difficulty collecting payments from its customers. Similarly, a large increase in unearned revenue could suggest that the company is relying heavily on advance payments for its services. A large prepaid expense could be a timing issue or reflect a large investment in future services.
Overall, the net cash from operating activities provides valuable insights into Dermani Medspa's financial performance and its ability to generate sustainable cash flows. Prospective franchisees should carefully review this information and consult with a financial advisor to assess the potential risks and rewards of investing in a Dermani Medspa franchise.