What was the net change in cash and restricted cash for Golden Krust Caribbean Restaurant in 2022?
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 net change in cash and restricted cash for the year ended December 31, 2022, was $905,919. This represents the overall increase in the company's cash and restricted cash holdings during that year. This figure is derived from the consolidated statement of cash flows, reflecting all cash inflows and outflows from operating, investing, and financing activities, as well as the effect of foreign currency exchange rates.
For a prospective franchisee, this number provides insight into the financial health and liquidity of Golden Krust Caribbean Restaurant. A positive net change suggests that the company generated more cash than it used during the year, which can be a sign of stability and growth potential. It's important to note that this is a consolidated figure, reflecting the performance of the parent company and its subsidiaries.
However, a franchisee should also consider the components that contribute to this net change. For example, the statement of cash flows details cash flows from operating activities, investing activities, and financing activities. Analyzing these individual components can provide a more nuanced understanding of how Golden Krust Caribbean Restaurant generated or used cash during the year. A significant increase in cash from financing activities, for instance, might indicate that the company relied on borrowing to fund its operations.
Therefore, while the net change in cash and restricted cash provides a high-level overview, prospective franchisees should review the entire statement of cash flows and related financial statements to gain a comprehensive understanding of Golden Krust Caribbean Restaurant's financial performance and stability. They should also compare these figures to previous years and industry benchmarks to assess the company's long-term trends and competitive position.