What was the net cash provided by financing activities for Golden Krust Caribbean Restaurant in 2022?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
| 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 |
Source: Item 23 — RECEIPT (FDD pages 35–153)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, the net cash provided by financing activities in 2022 was $1,517,351. This figure represents the net result of various financing activities, which include changes in notes receivable, due from related parties, and due to related parties. These activities reflect how the company manages its cash flow through borrowing, repayment, and transactions with related entities.
Specifically, the financing activities include a decrease in notes receivable of $87,246, an increase in due from related party of $322, and an increase in due to related parties of $1,604,275. The net effect of these individual items is the total net cash provided by financing activities.
For a prospective franchisee, understanding these financing activities is crucial as it provides insight into how Golden Krust Caribbean Restaurant manages its financial obligations and relationships with related parties. A high positive number could indicate strong financing inflows, while a negative number might suggest significant debt repayments or other financing outflows. Reviewing these figures over several years, as presented in the FDD, can help potential franchisees assess the financial stability and practices of the company.