What was the change in accounts receivables for 1-800-GOT-JUNK? for the period ended May 31, 2024?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
For the period ended May 31, 2025 and 2024
May 31 May 31
Cash provided by (used in):
Operating: Net income for the period
$ 288,999 $ 266,526 Items not involving cash: Amortization 9,288 20,952 Deferred income tax expense 59,707 32,952 Current income tax expense 25,716
Interest accrued for due to related parties 303,956 178,974 Bad debt
145,077 Income taxes paid (292,897) (69,581)
394,769 574,900 Changes in non-cash operating items: Accounts receivables 1,907,548 10,838,454 Due from related parties (1,340,526) (444,834) Prepaid expenses 237,174 13,745 Short-term investment (1,044) (538) Accounts payable and accrued liabilities (3,290,212) (541,944) Payable to franchisees (1,059,187) (10,075,702) Deferred revenue (37,475) (78,096) Due to related parties 5,710,937 2,797,879 Deposits 50,000
Withholding tax payable 226,407 (11,710)
2,798,391 3,072,154
Source: Item 21 — Financial Statements (FDD page 56)
What This Means (2025 FDD)
According to 1-800-GOT-JUNK?'s 2025 Franchise Disclosure Document, the change in accounts receivables for the period ended May 31, 2024, was $10,838,454. This figure is part of the consolidated statements of cash flows, reflecting the changes in non-cash operating items. It indicates the impact of accounts receivable on the company's cash flow during that specific period.
For a prospective 1-800-GOT-JUNK? franchisee, understanding this number is crucial as it reflects how efficiently the company is managing its incoming payments. A large positive number, like the one reported, suggests that 1-800-GOT-JUNK? saw a significant increase in accounts receivables, meaning that more revenue was earned but not yet collected in cash during that period. This could be due to various factors, such as changes in payment terms offered to customers or an increase in sales on credit.
However, it's important to consider this figure in conjunction with other financial metrics. While a high increase in accounts receivable might indicate strong sales, it also carries the risk of potential bad debts if these receivables are not collected promptly. Therefore, franchisees should inquire about 1-800-GOT-JUNK?'s credit policies, collection procedures, and the allowance for doubtful accounts to assess the quality of these receivables.
Overall, the accounts receivable change provides valuable insight into 1-800-GOT-JUNK?'s operational efficiency and cash management practices. Prospective franchisees should analyze this figure in the context of the company's overall financial health and risk management strategies to make informed investment decisions.