What was the net cash used by financing activities for Hyper Kidz in 2021?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
68 | | 1,468 | | Net income | | 52,292 | | | | - | | BALANCE, DECEMBER 31, 2022 | $ | 55,630 | $ | (176,919) | $ | (173,581) |
FOR THE YEARS ENDED DECEMBER 31, 2022, 2021 AND 2020 BOOMERANG FRANCHISE, LLC STATEMENTS OF CASH FLOWS
| 2022 | 2021 | 2020 | |
|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Net income) | $ 52,292 | $ 46,173 | $ 110,241 |
| Adjustments to reconcile net income to net | |||
| cash provided by operating activities: | |||
| Recognition of non-refundable deferred franchise sales | (4,279) | (3,950) | (6,913) |
| Changes in assets and liabilities: | |||
| Accounts receivable | (18,006) | ||
| Accrued expense | 2,993 | 820 | - |
| Royalties collected in advance | (36,612) | 36,612 | - |
| Non-refundable deferred franchise fees | 39,500 | ||
| Net cash provided by operating activities | 35,888 | 79,655 | 103,328 |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Proceeds from notes payable | - | 79,000 | - |
| Advances to affiliates, net | 1,468 | (163,377) | - |
| Member contributions | - | 1,800 | - |
| Member distributions | (30,000) | - | (100,386) |
| Net cash (used) by financing activities | (28,532) | (82,577) | (100,386) |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, the net cash used by financing activities in 2021 was $(82,577). This figure reflects the overall cash flow impact from activities related to funding the business, such as loans, investments, and distributions.
Specifically, in 2021, Hyper Kidz saw proceeds from notes payable of $79,000, advances to affiliates resulting in a cash outflow of $(163,377), member contributions of $1,800, and no member distributions. The net effect of these financing activities resulted in the $(82,577) net cash used.
A prospective franchisee should understand that 'net cash used by financing activities' indicates that the company used more cash for financing than it generated. This could be due to repaying debt, providing advances to affiliates, or other financial obligations. It is important to analyze these cash flow statements in conjunction with other financial statements to get a complete picture of Hyper Kidz's financial health and stability.