What is the relationship between the shares issued and the amount of common stock for Endless Summer Sweets?
Endless_Summer_Sweets Franchise · 2024 FDDAnswer from 2024 FDD Document
Endless Summer Sweets Franchising Inc. Statements of Stockholder's Equity For the Period Ended December 31, 2023
| Common Stock | |||||
|---|---|---|---|---|---|
| Number of | Retained | ||||
| Shares | Amount | Earnings | Total | ||
| Share Issued | 2,000 | $ | 2,000 | - | $ 2,000 |
| Net Income | - | - | $ (15,648) | $ (15,648) | |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 38)
What This Means (2024 FDD)
According to Endless Summer Sweets' 2024 Franchise Disclosure Document, the company issued 2,000 shares of common stock for a total value of $2,000 as of April 30, 2023. This indicates that each share was issued at a value of $1.00. The balance sheet reflects this initial investment by the stockholder. The retained earnings show a deficit of $15,648, resulting in a total stockholders' equity of $(13,648).
This information is crucial for prospective franchisees as it provides insight into the initial capitalization of Endless Summer Sweets. Understanding the relationship between shares issued and the amount of common stock helps in assessing the financial structure of the company. It also shows how much the company has in assets versus liabilities.
It's important to note that the financial statements only cover the period from March 9, 2023, to December 31, 2023, as Endless Summer Sweets has not been in business for three years or more. This limited operating history should prompt potential franchisees to conduct thorough due diligence and seek further clarification on the company's financial performance and projections.