What was the amount of cash flows used in investing activities for Monicals Pizza in 2022?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
| Cash flows from operating activities: | ||
|---|---|---|
| Net income | $ 1 ,680,571 | $ 8 94,285 |
| Adjustments to reconcile net income to net cash | ||
| flows from operating activities: | ||
| Depreciation | 1 ,165,083 | 1 ,177,751 |
| Amortization | 4 31,094 | 2 67,666 |
| Loss on sale of fixed assets | 2 ,404 | 1 ,030 |
| Short-term investment income | (192,657) | - |
| Noncash lease expense | 8 32,701 | 8 40,532 |
| Payments on finance leases | (362,606) | (212,222) |
| Changes in assets and liabilities: | ||
| Accounts receivable | (172,033) | (187,134) |
| Employee Retention Credit receivable | - | 5 ,639,415 |
| Inventories | 2 5,744 | 1 3,432 |
| Prepaid expenses and other current assets | 5 1,563 | (104,064) |
| Accounts payable | (163,754) | (146,248) |
| Gift cards redeemable, net | 2 0,096 | 2 4,095 |
| Accrued expenses and other current liabilities | 5 10,281 | (957,676) |
| Other long-term liabilities | (27,000) | (27,000) |
| Operating lease liabilities | (818,973) | (816,675) |
| NET CASH FLOWS FROM OPERATING ACTIVITIES | 2 ,982,514 | 6 ,407,187 |
| Cash flows used in investing activities: | ||
| Capital expenditures | (867,674) | (1,039,334) |
| Purchases of short-term investments | (5,555,000) | - |
| Proceeds from redemption of short-term investments | 2 6,612 | - |
| Cash paid for acquisition of franchise store (See Note 2) | (830,000) | - |
| Payments received on notes receivable | 1 ,686 | 3 ,301 |
| NET CASH FLOWS USED IN INVESTING ACTIVITIES | (7,224,376) | (1,036,033) |
| Cash flows used in financing activities: | ||
| Issuance of common stock | - | 2 4,729 |
| Distributions to shareholders | (1,867,625) | (4,364,263) |
| NET CASH FLOWS USED IN FINANCING ACTIVITIES | (1,867,625) | (4,339,534) |
| NET INCREASE (DECREASE) IN CASH | (6,109,487) | 1 ,031,620 |
| Cash at beginning of year | 9 ,525,798 | 8 ,494,178 |
| CASH AT END OF YEAR | $ 3 ,416,311 | $ 9 ,525,798 |
Source: Item 23 — RECEIPTS (FDD pages 46–257)
What This Means (2025 FDD)
According to Monicals Pizza's 2025 Franchise Disclosure Document, the net cash flows used in investing activities in 2022 were $(1,036,033). This figure represents the total cash outflow resulting from investments made by the company during that year.
Specifically, this total includes capital expenditures of $(1,039,334) and payments received on notes receivable of $3,301. Capital expenditures typically involve the purchase of long-term assets such as property, plant, and equipment, which are essential for business operations and future growth. Notes receivable represent money owed to Monicals Pizza, and payments received on these notes increase the cash flow from investing activities.
For a prospective franchisee, understanding these cash flow dynamics is crucial. It provides insight into how Monicals Pizza manages its investments and allocates capital. A significant outflow in investing activities, like the one seen in 2022, might indicate substantial investments in the business, which could lead to future growth and profitability. However, it's important to consider these figures in the context of the company's overall financial health and strategic objectives.