What was the net cash provided by operations for Learningrx in 2022?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
--------------------|------|---------|---|------|----------| | Net Income (Loss) | | 7,181 | - | | (55,041) | | Retained Earnings, End of Year | $ | 773,206 | _ | $ | 766,025 |
LearningRx Franchise Corporation Statements of Cash Flows For the Years Ended September 30, 2023 and 2022
| 2023 | 2022 | ||
|---|---|---|---|
| Cash Flows from Operating Activities | |||
| Net income (loss) | $ | 7,181 | $ (55,041) |
| Depreciation | 898 | 898 | |
| Changes in assets and liabilities: | |||
| Accounts receivable, net | 3,437 | 65,400 | |
| Prepaid expenses | 1,635 | - | |
| Due from related parties | - | 100,000 | |
| Deferred income tax asset | 11,350 | 4,466 | |
| Accounts payable | 5,871 | (22,734) | |
| Liability for marketing and development | 14,328 | 39,180 | |
| Deferred franchise fee revenue | (28,000) | 28,000 | |
| Net Cash Provided by Operations | 16,700 | 160,169 | |
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, the net cash provided by operations in 2022 was $160,169. This figure represents the cash flow generated from Learningrx's normal business activities, indicating the company's ability to generate cash from its operations during that year. This is an important metric for prospective franchisees to consider, as it reflects the financial health and stability of the franchisor.
Specifically, the statement of cash flows details how Learningrx generated this cash. It starts with a net loss of $(55,041), which is then adjusted for various non-cash items and changes in working capital accounts to arrive at the net cash provided by operations. These adjustments include depreciation ($898), changes in accounts receivable ($65,400), due from related parties ($100,000), deferred income tax asset ($4,466), accounts payable ($22,734), liability for marketing and development ($39,180), and deferred franchise fee revenue ($28,000).
The fact that Learningrx had a net loss but still generated positive cash flow from operations suggests that the company's business model is effective at converting revenues into cash. This could be due to efficient management of working capital, strong collections, or other factors. A prospective franchisee should investigate these factors further to understand the drivers of Learningrx's cash flow and assess the sustainability of this performance. Understanding the difference between net income and cash flow from operations is crucial for evaluating the overall financial performance of Learningrx.
It's also worth noting that the net cash provided by operations in 2023 was significantly lower at $16,700. This highlights the importance of analyzing trends over multiple years to get a more complete picture of Learningrx's financial performance. A prospective franchisee should inquire about the reasons for this decrease and whether it is expected to continue in the future.