What was the net cash provided (used) by operating activities for Expense Reduction Analysts in 2022?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
of Noncontrolling Interest | | 4 | - | 2,468 | (2,468) | 1 4 | | Net Income | | - | | 1,142,947 | 8,779 | 1,151,726 | | BALANCE - DECEMBER 31, 2023 | 18,777,777 | $ 18,778 | $ 4,209,422 | $ 1,237,283 | $ 32,360 | $ 5,497,843 |
| 2023 | () | restated) 2022 | ||
|---|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | 277.7 | |||
| Net Income | $ | 1,151,726 | $ | 156,786 |
| Adjustments to Reconcile Net Income to Net Cash | ||||
| Provided (Used) by Operating Activities: | ||||
| Depreciation and Amortization | 16,176 | 8,120 | ||
| Noncash Operating Lease Expense | (83) | 752 | ||
| Deferred Income Taxes | 126,213 | (25,851) | ||
| Effects of Changes in Operating Assets and Liabilities: | ||||
| Accounts Receivable | (257,417) | 95,648 | ||
| Prepaid Incremental Franchise Costs | 100 | |||
| Prepaid Expenses and Other Assets | (591,166) | 28,358 | ||
| Accounts Payable | 63,936 | (65,897) | ||
| Accrued Expenses | 141,931 | (81,014) | ||
| Training Fees Payable | 41,750 | (27,750) | ||
Source: Item 23 — RECEIPTS (FDD pages 58–215)
What This Means (2025 FDD)
According to Expense Reduction Analysts' 2025 Franchise Disclosure Document, the net cash provided (used) by operating activities in 2022 was a negative number. Specifically, the FDD states that Expense Reduction Analysts used $289,940 in operating activities during 2022. This figure reflects the net cash flow resulting from the company's core business operations, after accounting for revenues, expenses, and changes in working capital accounts.
A negative value indicates that Expense Reduction Analysts' operating activities consumed more cash than they generated during that period. This can arise from various factors, such as increased accounts receivable, decreased accounts payable, or net losses. While a single year of negative cash flow from operations is not necessarily alarming, it's a point for prospective franchisees to investigate further.
Understanding the reasons behind this negative cash flow is crucial. Potential franchisees should inquire about the specific factors that contributed to this outcome and whether Expense Reduction Analysts has implemented any strategies to improve its operating cash flow in subsequent years. Reviewing trends over multiple years, not just a single year, provides a more comprehensive view of the company's financial health and stability.