What was the cash and restricted cash at the beginning of the year for Golden Krust Caribbean Restaurant in 2021?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
100 | $ | (5,271,693) | $ | - | $ (5,101,593) | *No par value, 200 shares authorized, 100 shares issued and outstanding at December 31, 2022 and 2021.
GOLDEN KRUST FRANCHISING, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
| CASH FLOWS PROVIDED BY (USED FOR): | Year Ended December 31, 2022 | 2021 |
|---|---|---|
| OPERATING ACTIVITIES: | ||
| Net income (loss) | $ 1,141,393 $ | (659,030) |
| Adjustments to reconcile net income (loss) to net cash and | ||
| restricted cash (used for) provided by operating activities: | ||
| Related party loan forgiveness | - | (567,961) |
| Depreciation and amortization expense | 91,007 | 106,297 |
| Non-cash lease expense | 54,540 | - |
| Bad debt expense (recoveries) | 196,574 | (490,229) |
| Change in allowance for notes receivable | 14,999 | (61,613) |
| Loss on disposal of equipment | 3,400 | 14,800 |
| Changes in certain assets and liabilities: | ||
| Accounts receivable | (477,332) | 343,400 |
| Inventory | 3,715 | (2,414) |
| Prepaid expenses | 35,908 | (40,254) |
| Other noncurrent assets | 31,812 | (456) |
| Accounts payable | 277,304 | (56,591) |
| Accrued expenses | (2,369,929) | 2,087,305 |
| Deferred franchise fees | (95,050) | 85,408 |
| Other current liabilities | (38,144) | 12,604 |
| Deferral of employment tax deposits and payments | (50,438) | (50,433) |
| Employee retention credit | 580,958 | (580,958) |
| Net Cash (Used for) Provided By Operating Activities | (599,283) | 139,875 |
| INVESTING ACTIVITIES: | ||
| Purchases of property and equipment | (21,215) | (8,000) |
| Net Cash Used for Investing Activities | (21,215) | (8,000) |
| FINANCING ACTIVITIES: | ||
| (Decrease) increase in notes receivable | (87,246) | 189,000 |
| Decrease (increase) in due from related party | 322 | (49,000) |
| Increase (decrease) in due to related parties | 1,604,275 | (299,000) |
| Net Cash Provided by (Used for) Financing Activities | 1,517,351 | (159,00 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, the beginning of the year cash and restricted cash for 2021 was $484,000. This figure represents the total amount of readily available funds Golden Krust Caribbean Restaurant had at the start of the 2021 fiscal year, including any cash held for specific purposes that were restricted.
For a prospective franchisee, understanding the franchisor's cash position is crucial. It provides insight into the financial health and stability of Golden Krust Caribbean Restaurant. A healthy cash balance suggests that the franchisor has sufficient resources to support its operations, invest in growth, and potentially provide support to franchisees during challenging times.
However, it is important to note that this figure is just a snapshot in time. The cash position of Golden Krust Caribbean Restaurant can fluctuate throughout the year due to various factors such as revenue, expenses, investments, and financing activities. Therefore, a prospective franchisee should also review the franchisor's cash flow statement to understand how cash is generated and used over a period of time. Additionally, it's important to consider the restricted nature of some of the cash, as these funds may not be available for general use.
The FDD also includes financial statements for 2022 and 2023, allowing potential franchisees to analyze trends and assess the overall financial performance of Golden Krust Caribbean Restaurant over multiple years. Reviewing these statements in their entirety, along with consulting with a financial advisor, can provide a more comprehensive understanding of the financial risks and opportunities associated with investing in a Golden Krust Caribbean Restaurant franchise.