What was the net cash used by operating activities for Fly Fitness in 2023?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
Members' equity, beginning of year | 312,625 | | Members' equity, end of year | $ 146,051 |
STATEMENT OF CASH FLOWS
| For the Year Ended December 31 | 2023 |
|---|---|
| Increases (decreases) in cash and cash equivalents | |
| Cash flows from operating activities | $ (166,574) |
| Net income (loss) | |
| Adjustments to reconcile net loss to net cash used by | 12,500 |
| operating activities | |
| Amortization | |
| Increase in operating liabilities Accounts payable Credit cards payable Accrued payroll Deferred revenue | 5,200 7,853 2,405 50,000 |
| Net cash used by operating activities | $ (88,616) |
| NET CHANGE IN CASH A |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 44)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the net cash used by operating activities in 2023 was $(88,616). This figure indicates the cash outflow resulting from the company's core business operations during that year. It reflects the difference between cash inflows generated from activities like franchise fees and cash outflows related to expenses such as salaries, rent, and marketing.
For a prospective Fly Fitness franchisee, this information is crucial for understanding the financial health and stability of the franchisor. A negative net cash flow from operating activities suggests that the company is spending more cash than it is generating from its primary business activities. This could be due to various factors, such as high operating costs, low revenue, or investments in growth initiatives.
It's important to note that a single year's figure doesn't necessarily indicate a long-term problem. However, a consistent pattern of negative cash flow from operations could raise concerns about the company's ability to sustain its operations and support its franchisees. Therefore, prospective franchisees should carefully analyze Fly Fitness's financial statements, including the statement of cash flows, to assess the company's financial performance and identify any potential risks or challenges.
In addition to the net cash used by operating activities, the FDD also provides details on other cash flow activities, such as investing and financing activities. Analyzing these figures can provide a more comprehensive understanding of Fly Fitness's overall financial position and its ability to generate cash and fund its operations. Prospective franchisees should consult with a financial advisor to interpret these financial statements and assess the potential risks and rewards of investing in a Fly Fitness franchise.