What was the total amount of common stock issued by 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 | - |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 38)
What This Means (2024 FDD)
According to Endless Summer Sweets' 2024 Franchise Disclosure Document, the total amount of common stock issued is detailed in the Statement of Stockholder's Equity. For the period ending December 31, 2023, Endless Summer Sweets issued 2,000 shares of common stock, which amounted to $2,000. This initial stock issuance represents the capital raised through equity at the company's inception. The retained earnings at this time were ($15,648), resulting in a total equity of ($13,648).
This information is crucial for prospective franchisees as it provides insight into the company's capitalization and financial structure. The initial capitalization through common stock indicates the foundational equity investment in the franchise system. The negative retained earnings suggest that the company had initial losses, which is not uncommon for a new business.
Understanding the equity structure helps potential franchisees assess the financial stability and long-term viability of Endless Summer Sweets. It is important to note that while the initial common stock issued was $2,000, the overall financial health and performance should be evaluated in conjunction with other financial statements, such as the income statement and cash flow statement, to gain a comprehensive understanding of the company's financial standing.