What was the Itan net earnings used for operating activities in 2024?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
---------------------------|--------|------------|-------------------|------|------------|-----|------------------------|----|--------| | Balance at December 31, 2022 | 1,500 | $ 50,000 | $ 38 | ,000 | $ 1,432, | 517 | $ 1,520,517 | | | | Net earnings | | | | | 272,: | 146 | 272,146 | | | | Balance at December 31, 2023 | 1,500 | 50,000 | 38 | ,000 | 1,704, | 663 | 1,792,663 | | | | Net earnings | | 1.550 2 | | | 19,: | 389 | 19,389 | | | | Balance at December 31, 2024 | 1,500 | $ 50,000 | $ 38 | ,000 | $ 1,724,0 | 052 | $ 1,812,052 | | | | | | | | Page 7 | |-------------------------------------------------------------------------------------------|----|-----------|----|-----------| | | | 2024 | | 2023 | | CASH FLOWS (USED)/PROVIDED BY OPERATING ACTIVITIES | | | | | | Net earnings | $ | 19,389 | $ | 272,146 | | ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH PROVIDED/(USED) BY OPERATING ACTIVITIES | | | | | | Depreciation | | 17,927 | | 443 | | Credit loss expense | | 284 | | - | | Changes in operating assets and liabilities: | | | | | | Accounts receivable | | (29,787) | | 4,540 | | Prepaid expenses | | (4,230) | | 74,586 | | Prepaid taxes | | (6,030) | | 5,087 | | Income tax receivable | | (131,945) | | - | | Deferred tax asset | | (3,592) | | (32,366) | | Accounts payable | | 12,264 | | 2,973 | | Accrued liabilities | | 15,596 | | 16,196 | | Accrued taxes | | (60,182) | | 44,709 | | Contract liabilities
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the net earnings for operating activities in 2024 were $19,389. This figure is part of the statement of cash flows, which outlines how Itan generated and used cash during the year. The statement also includes adjustments to reconcile net earnings to net cash used by operating activities. These adjustments include depreciation ($17,927), credit loss expense ($284), and changes in various operating assets and liabilities.
The adjustments to reconcile net earnings to net cash used by operating activities include several changes in assets and liabilities. These include accounts receivable (-$29,787), prepaid expenses (-$4,230), prepaid taxes (-$6,030), income tax receivable (-$131,945), deferred tax asset (-$3,592), accounts payable ($12,264), accrued liabilities ($15,596), accrued taxes (-$60,182), contract liabilities (-$11,500), and deferred tax liability ($10,331). The total adjustments amount to (-$190,864).
After accounting for these adjustments, the net cash used by operating activities for Itan in 2024 was (-$171,475). This indicates that Itan's core business operations consumed more cash than they generated during the year. This is a critical metric for prospective franchisees to consider, as it reflects the financial sustainability and operational efficiency of the franchisor. A negative cash flow from operations could signal potential challenges in managing working capital or generating sufficient revenue to cover expenses.