What does Gold Star consider as cash for the purposes of consolidated statements of cash flows?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
at relate to shipping and handling in net sales on the consolidated statements of income and comprehensive income.
The Company considers all shipping and handling costs to be fulfillment activity and not a separate performance obligation. Shipping and handling costs are included in cost o
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, for the purposes of consolidated statements of cash flows, Gold Star includes cash on hand and cash in a checking account as cash. This definition is important for understanding the company's cash flow statements, as it clarifies what assets are considered liquid and readily available for the company's immediate use.
This definition is fairly standard in financial accounting. It means that when Gold Star reports its cash flow, it is including physical currency it holds and the money it has readily accessible in its checking accounts. This is a key metric for assessing the company's short-term liquidity and its ability to meet its immediate obligations.
Prospective franchisees should understand this definition to accurately interpret Gold Star's financial statements. Knowing what constitutes "cash" helps in evaluating the company's financial health and stability, which is crucial for making informed investment decisions. Additionally, the FDD notes that at various times throughout the year, Gold Star may have cash in certain financial institutions in excess of insured limits, with the Federal Deposit Insurance Corporation (FDIC) insuring account balances up to $250,000 for each business depositor.