For the year ended December 31, 2024, what were Ledgers' negative operating cash flows?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
CES, LLC (FORMERLY FIDE HOLDING, LLC) Notes to Financial Statement
NOTE 9 - PRIOR PERIOD ADJUSTMENT (Continued)
The effect of these restatement is to decrease members' equity as of January 1 as follows:
| Previously | As | |
|---|---|---|
| 2023 Restatement | Reported | Restated |
| Members' equity - January 1, 2024 | $1,374,619 | $1,155,501 |
| Notes Receivable | 792,878 | 40,760 |
| Deferred Revenue | 680,989 | 147,989 |
| Bad Debt Expense | 75,206 | 294,324 |
| Net loss | (287,482) | (506,600) |
NOTE 10 - GOING CONCERN CONSIDERATIONS
As of December 31, 2024, the Company had negative working capital of $468,670. For the year ended December 31, 2024, the Company had operating losses of $490,281 and negative operating cash flows of $471,328. Ma
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, for the year ended December 31, 2024, the company had negative operating cash flows of $471,328. This indicates that Ledgers used more cash than it generated from its core business operations during that period.
This is an important figure for prospective franchisees to consider, as negative operating cash flow can signal financial instability. It means that Ledgers had to rely on other sources of funding, such as investments or financing, to cover its operational expenses. This could impact the level of support and resources available to new franchisees.
However, the document also indicates that Ledgers' management has taken strategic measures to address these financial challenges, including reducing personnel costs and maintaining a cash reserve. Additionally, Ledgers has entered into a new strategic relationship with Bookkeeping Express, which is expected to generate new franchisee referrals. These measures suggest that Ledgers is actively working to improve its financial position and ensure its long-term viability.
Prospective franchisees should carefully evaluate Ledgers' financial statements and consider the company's plans for addressing its negative operating cash flow. It would be prudent to inquire about the specific details of the strategic relationship with Bookkeeping Express and its potential impact on franchisee recruitment and support.