What was the net change in cash from operating activities for Kitchen Solvers in 2024?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
| Statements of Cash Flows | |||||
|---|---|---|---|---|---|
| Years Ended December 31, 2024, 2023, and 2022 | 2024 | 2023 | 2022 | ||
| Increase (decrease) in cash: | |||||
| Cash flows from operating activities | |||||
| Net income | $ 464,580 | $ 210,640 | $ 232,257 | ||
| Adjustments to reconcile net income to net | |||||
| cash provided by operating activities: | |||||
| Depreciation | 10,880 | 6,555 | 1,585 | ||
| Noncash lease expense | 40,121 | 10,262 | - | ||
| Changes in operating assets and liabilities: | |||||
| Accounts receivable | 75,001 | 1,889 | ( 47,979) | ||
| Accounts receivable - related party | ( 174,152) | - | - | ||
| Contract assets | ( 61,597) | ( 107,296) | ( 194,671) | ||
| Advances receivable | - | 74,472 | 75,000 | ||
| Other receivable | - | 3,260 | ( 3,260) | ||
| Inventory | ( 14,536) | ( 14,106) | - | ||
| Prepaid expenses | 16 | ( 2,293) | - | ||
| Accounts payable | 31,571 | ( 38,816) | 55,390 | ||
| Accrued and other liabilities | 17,806 | - | - | ||
| Deferred revenue | 12,268 | 76,042 | - | ||
| Contract liabilities | 229,411 | 171,452 | 275,741 | ||
| Lease liabilities - operating | ( 39,479) | ( 10,529) | - | ||
| Net change in cash from operating activities | 591,890 | 381,532 | 394,063 | ||
| Cash flows from investing activities: | |||||
| Purchases of property and equipment | ( 53,517) | ( 73,253) | - | ||
| Net change in cash from investing activities | ( 53,517) | ( 73,253) | - | ||
| Cash flows from financing activities | |||||
| Note payable - Officer | 2,455 | ( 16,126) | 18,049 | ||
| Proceeds from long-term debt | - | 56,700 | - | ||
| Principal payments on long-term debt | ( 18,523) | ( 13,020) | - | ||
| Member distributions | ( 304,910) | ( 204,000) | ( 409,849) | ||
| Net change in cash from financing activities | ( 320,978) | ( 176,446) | ( 391,800) | ||
| Net change in cash | 217,395 | 131,833 | 2,263 | ||
| Cash, beginning of year | 192,541 | 60,708 | 58,445 | ||
| Cash, end of year | $ 409,936 | $ 192,541 | $ 60,708 |
Source: Item 23 — Receipts (FDD pages 49–190)
What This Means (2025 FDD)
According to Kitchen Solvers' 2025 Franchise Disclosure Document, the net change in cash from operating activities in 2024 was $591,890. This figure represents the cash generated or used by the company's core business operations during the year. It's a key indicator of Kitchen Solvers' ability to fund its operations and growth through its primary activities.
To arrive at this number, Kitchen Solvers started with its net income of $464,580 and made several adjustments. These adjustments account for non-cash items and changes in various operating assets and liabilities. For example, depreciation ($10,880) and noncash lease expense ($40,121) were added back, as they represent expenses that don't involve an actual outflow of cash. Changes in accounts receivable ($75,001), accounts receivable from related parties ($-174,152), contract assets ($-61,597), inventory ($-14,536), prepaid expenses ($16), accounts payable ($31,571), accrued and other liabilities ($17,806), deferred revenue ($12,268), contract liabilities ($229,411), and lease liabilities ($-39,479) were also factored in to reflect the actual cash impact of these items.
A positive net change in cash from operating activities, like the $591,890 reported by Kitchen Solvers, generally indicates that the company is generating sufficient cash flow from its operations to cover its expenses and potentially invest in growth opportunities. This is a positive sign for prospective franchisees, as it suggests that the Kitchen Solvers business model is financially sustainable.
However, it's important for potential franchisees to analyze the components of this cash flow to understand the underlying drivers. For instance, a significant increase in accounts receivable could indicate potential issues with collecting payments from customers. Similarly, a large increase in accounts payable might suggest that the company is stretching out its payments to suppliers. A thorough review of these details can provide a more complete picture of Kitchen Solvers' financial health and stability.