What was the net increase (decrease) in cash for Fat Shack in 2024?
Fat_Shack Franchise · 2025 FDDAnswer from 2025 FDD Document
AT SHACK INC. AND SUBSIDIARY STATEMENTS OF CASH FLOWS
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Cash Flows from Operating Activities: | |||
| Net income | $ 130,795 | 218,715 | 383,725 |
| Depreciation | 6,876 | 6,876 | 8,124 |
| Adjustments to reconcile net income to net cash | |||
| provided by operating activities: | |||
| Changes in assets and liabilities | |||
| Accounts receivable | 15,602 | 20,637 | |
| Rebates receivable | 12,366 | 6,717 | (14,597) |
| Due from franchisees | 13,175 | (4,486) | (14,099) |
| Security deposits | 3,000 | ||
| Notes receivable | (221,327) | 48,940 | (37,779) |
| Due from related parties | 261,000 | (70,001) | (603,870) |
| Deferred tax asset | 2,088 | 15,747 | (18,102) |
| Accounts payable and accrued expenses | (11,982) | (12,327) | (28,664) |
| Income taxes payable | (2,674) | 2,674 | (49,893) |
| Gift card payable | (388) | 712 | 7,581 |
| Rebates payable | 19,912 | (5,328) | |
| Deferred revenue | 15,000 | (15,000) | (25,000) |
| Loan Payable | (194,786) | (185,212) | (74,376) |
| Other current assets | (516) | 3,699 | |
| 29,539 | 32,656 | (448,641) | |
| Cash Flows from Financing Activities | |||
| Proceeds from Loan | 572,700 572,700 | ||
| Cash Flows from Investing Activities | |||
| Dividends paid | (180,000) | (165,000) | (150,000) |
| (180,000) | (165,000) | (150,000) | |
| Net Increase (Decrease) in Cash | (150,461) | (132,344) | (25,941) |
| Cash - Beginning | 189,456 | 321,800 | 347,741 |
Source: Item 23 — Receipts (FDD pages 53–223)
What This Means (2025 FDD)
According to Fat Shack's 2025 Franchise Disclosure Document, the net decrease in cash for Fat Shack in 2024 was $150,461. This indicates that Fat Shack's cash outflow exceeded its cash inflow during the year. This figure is derived from the statement of cash flows, which summarizes the movement of cash both into and out of the company.
Specifically, the statement of cash flows categorizes these movements into operating, investing, and financing activities. The net decrease in cash reflects the combined impact of these activities on Fat Shack's overall cash position. For a prospective franchisee, this information is useful in understanding the financial dynamics of the company.
While a decrease in cash might raise concerns, it's important to consider the context. For example, the decrease could be due to strategic investments in growth initiatives, such as opening new franchise locations or enhancing marketing efforts. Alternatively, it could signal underlying financial challenges that require further investigation. A potential franchisee should review the complete statement of cash flows and related financial statements to understand the reasons behind the decrease in cash and assess the long-term financial health of Fat Shack.
It is also important to compare these figures with previous years and industry benchmarks to determine whether this decrease is an anomaly or a consistent trend. Furthermore, prospective franchisees should inquire about Fat Shack's strategies for managing cash flow and ensuring financial stability.