What was the net cash flow from operating activities for Monicals Pizza in 2023?
Monicals_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
----------------|-----------------|-----------------| | Cash flows from operating activities: | | | | Net income | $ 1,849,358 | $ 1,680,571 | | Adjustments to reconcile net income to net cash | | | | flows from operating activities: | | | | Depreciation | 1,119,873 | 1,165,083 | | Amortization | 471,076 | 431,094 | | Loss on sale of fixed assets | - | 2,404 | | Short-term investment income | (360,258) | (192,657) | | Noncash lease expense | 822,885 | 832,701 | | Changes in assets and liabilities: | | | | Accounts receivable | 366,434 | (172,033) | | Inventories | 354 | 25,744 | | Prepaid expenses and other current assets | (47,711) | 51,563 | | Accounts payable | (10,875) | (163,754) | | Gift cards redeemable, net | 24,292 | 20,096 | | Accrued expenses and other current liabilities | (786,488) | 510,281 | | Other long-term liabilities | 52,000 | (27,000) | | Operating lease liabilities | (817,311) | (818,973) | | NET CASH FLOWS FROM OPERATING ACTIVITIES | 2,683,629 | 3,345,120 | | | | | | Cash flows from investing activities: | | | | Capital expenditures | (1,240,497) | (867,674) | | Purchases of short-term investments | (1,000,000) | (5,555,000) | | Proceeds from redemption of short-term investments | 2,669,566 | 26,612 | | Cash paid for acquisition of franchise store (See Note 2) | - | (830,000) | | Payments received on notes receivable | - | 1,686 | | NET CASH FLOWS FROM INVESTING ACTIVITIES | 429,069 | (7,224,376) | | Cash flows from financing activities: | | | | Distributions to shareholders | (2,193,095) | (1,867,625) | | Payments on finance leases | (352,465) | (362,606) | | NET CASH FLOWS FROM FINANCING ACTIVITIES | (2,545,560) | (2,230,231) | | NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 567,138 | (6,109,487) | | Cash and cash equivalents at beginning of year | 3,416,311 | 9,525,798 | | CASH AND CASH EQUIVALENTS AT END OF YEAR | $ 3,983,449 | $ 3,416,311 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Monical Pizza C
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 flow from operating activities for the year 2023 was $3,345,120. This figure represents the cash generated by the company's core business operations during that year.
This number is derived by starting with the net income of $1,680,571 and then adjusting for various non-cash items and changes in working capital accounts. These adjustments include depreciation ($1,165,083), amortization ($431,094), and changes in accounts receivable ($-172,033), inventories ($25,744), prepaid expenses ($51,563), accounts payable ($-163,754), gift cards redeemable ($20,096), accrued expenses ($510,281), other long-term liabilities ($-27,000), operating lease liabilities ($-818,973), loss on sale of fixed assets ($2,404), short-term investment income ($-192,657) and noncash lease expense ($832,701).
For a prospective Monicals Pizza franchisee, understanding the net cash flow from operating activities is crucial. It indicates the financial health and stability of the company. A positive and growing cash flow suggests that the company is effectively managing its operations and generating sufficient cash to cover its expenses and invest in future growth. However, it is important to review the components of this cash flow to understand what is driving the changes from year to year.
It is also important to note that while the net cash flow from operating activities was $3,345,120 in 2023, it was $2,683,629 in 2024. This decrease in net cash flow from operating activities should be investigated further to understand the reasons for the change.