What was the amount of cash paid for interest and taxes by Extreme Art Studio?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
TATEMENT OF CASH FLOWS For the Year Ended December 31, 2023
| Cash flows from operating activities: Net loss | $ (7,621) |
|---|---|
| Net cash used by operating activities | (7,621) |
| Cash flows from financing activities | |
| Member contributions | 22,622 |
| Net cash provided by financing activities | 22,622 |
| Net change in cash and cash equivalents | 15,001 |
| Cash and cash equivalents at beginning of period | |
| Cash and cash equivalents at end of period | $ 15,001 |
| Supplemental disclosures |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, the company paid no cash for interest and taxes. The Statement of Cash Flows indicates that for the year ending December 31, 2023, the cash paid for interest and taxes was $0. This suggests that Extreme Art Studio had no cash outflow for these expenses during the reported period.
For a prospective franchisee, this information provides insight into the financial management and obligations of Extreme Art Studio. The absence of interest payments could indicate that the company has limited or no debt, which might reflect positively on its financial stability. Similarly, the lack of cash payments for taxes could be due to the company's structure as a limited liability company (LLC), where income and losses are passed through to the members' tax returns, as noted in the financial statement notes.
It is important to note that this data reflects only the franchisor's financial activities and not those of individual franchisees. Franchisees should still conduct their own due diligence and consult with financial advisors to understand their potential tax and interest obligations when operating an Extreme Art Studio franchise.