What was the total decrease in cash and cash equivalents for Engineering For Kids in 2024?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
,219 | 37,219 | | BALANCE, December 31, 2024 | $ 100 | $ 112,512 | $ 112,612 |
ENGINEERING FOR KIDS INTERNATIONAL, LLC STATEMENTS CASH FLOWS YEARS ENDED DECEMBER 31, 2024 2023, AND 2022
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| INCREASE (DECREASE) IN CASH AND CASH | |||
| EQUIVALENTS | |||
| Cash flows from operating activities | $ 37,219 | $ 34,933 | $ 56,260 |
| Net income | |||
| Adjustments to reconcile net income to | |||
| net cash provided (used) by operating activities | |||
| Amortization | 10,437 | - | 2,235 |
| Changes in assets and liabilities | |||
| Accounts receivable | (13,138) | 16,709 | (44,865) |
| Prepaid expenses | 3,625 | 111 | 8,879 |
| Accounts payable | (320) | (6,318) | - |
| Due to/from related party | (130,008) | 63,874 | 30,249 |
| Accrued liabilities | (1,927) | 6,244 | (20,060) |
| Total adjustments | (131,331) | 80,620 | (23,562) |
| Net cash provided (used) by operating activities | (94,112) | 115,553 | 32,698 |
| Cash flows from investing activities | |||
| Investment in intangible assets | (1,808) | (28,934) | (22,345) |
| NET INCREASE (DECREASE) IN CASH AND | (95,920) | 86,619 |
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to Engineering For Kids' 2025 Franchise Disclosure Document, the net decrease in cash and cash equivalents in 2024 was $95,920. This indicates that Engineering For Kids had a greater outflow of cash than inflow during the year. This decrease is calculated by taking into account cash flows from operating activities and investing activities. The beginning cash and cash equivalents for 2024 was $117,655, and the ending cash and cash equivalents was $21,735.
For a prospective franchisee, this decrease in cash and cash equivalents could signal potential financial challenges within Engineering For Kids. While not necessarily alarming on its own, it would be prudent to investigate the reasons behind this decrease. Understanding whether it stems from increased investments, decreased revenues, or other factors is crucial for assessing the financial stability of the franchisor.
It's important to note that a single year's decrease does not automatically indicate long-term financial instability. However, a prospective franchisee should review Engineering For Kids' financial statements for previous years to identify any trends. Comparing these figures with industry benchmarks and understanding the franchisor's plans for addressing the decrease are essential steps in evaluating the overall risk and opportunity associated with investing in an Engineering For Kids franchise.