What was the net cash used in operating activities for Ledgers in 2023?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
,914 | | Net loss | | (447,527) | (447,527) | | Balances, December 31, 2022 | 3,200,000 | (1,495,613) | 1,704,387 | | Adoption of Topic 326 | | (42,286) | (42,286) | | Net loss (Restated) | | (506,600) | (506,600) | | Balances, December 31, 2023 (Restated) | 3,200,000 | (2,044,499) | 1,155,501 | | Net loss | | (361,991) | (361,991) | | Balances, December 31, 2024 | $ 3,200,000 | $ (2,406,490) | $ 793,510 |
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Statements of Cash Flow
For the Years Ended December 31, 2024, 2023, and 2022
| 2024 | 2023 | 2022 | |||
|---|---|---|---|---|---|
| Cash flows from operating activities: | J.S | ||||
| Net loss | $ | (361,991) | $ (506,600) | $ | (447,527) |
| Adjustments to reconcile net loss to net cash | |||||
| used in operating activities: | |||||
| Change in allowance for credit losses | = | 67,468 | - | ||
| Write off of notes receivable, net of | |||||
| deferred revenue |
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, the net cash used in operating activities in 2023 was $(593,634). This figure reflects the total cash outflow from the company's core business operations during that year.
For a prospective franchisee, this indicates that Ledgers' business model required more cash to operate than it generated in 2023. This could be due to various factors such as operating losses, changes in working capital, or other non-cash adjustments. It is important to note that the 2023 financial statements have been restated to correct a misstatement.
Understanding the reasons behind negative cash flow from operations is crucial. A potential franchisee should investigate the specific factors contributing to this, such as revenue trends, expense management, and working capital efficiency. While negative cash flow can be a concern, it's essential to consider the context, including any strategic initiatives or investments that may be impacting short-term cash flow but are expected to drive future growth and profitability. It would be prudent to discuss these figures with Ledgers to understand the reasons behind this and what steps have been taken to improve this figure.