What was the cash and equivalents at the beginning of the year for Endless Summer Sweets Franchising Inc.?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
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Endless Summer Sweets Franchising Inc. Statement of Cash Flows From March 9 to December 31, 2023
| Net Income | $ | (15,648) |
|---|---|---|
| Net cash provided (consumed) by operating activities | (15,648) | |
| Cash flows from financing activities: | ||
| Stockholders' Contribution | 2,000 | |
| Short Term Loan-Endless Summer Sweets, LLC | 15,648 | |
| Net cash provided (consumed) by financing activities | 17,648 | |
| Net increase (decrease) in cash and e |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 38)
What This Means (2024 FDD)
According to Endless Summer Sweets' 2024 Franchise Disclosure Document, the cash and equivalents at the beginning of the year was listed as zero. The balance sheet was audited by Gautam Kumar, President, CPA of FACT Professional, Inc.
This indicates that Endless Summer Sweets started the period from March 9, 2023, to December 31, 2023, with no cash or cash equivalents. However, by the end of the year, the company's cash and equivalents totaled $2,000. This increase is reflected in the statement of cash flows, showing a net increase of $2,000 in cash and equivalents during this initial period of operation.
For a prospective franchisee, this information highlights the early-stage nature of the Endless Summer Sweets franchise system. The fact that the company started with no cash and equivalents may reflect the initial investment phase of the business. It's important to note that the company was formed in March 2023, and the financial statements cover the period from March 9, 2023, to December 31, 2023. This limited operating history should prompt potential franchisees to conduct thorough due diligence and seek clarification from the franchisor regarding their financial stability and growth plans.