What was the amount of the change in accounts receivable for Antioch Pizza Shop in 2024?
Antioch_Pizza_Shop Franchise · 2025 FDDAnswer from 2025 FDD Document
330 | 218,330 | | Balances at December 31, 2023 | 1,000 | $ | 10 | $ | 6,810 | $ | 245,516 | $ 252,336 |
STATEMENTS OF CASH FLOWS
For the years ended December 31, 2024, 2023, and 2022
| 2024 | 2023 | 2022 | ||||
|---|---|---|---|---|---|---|
| Cash flows from operating activities | ||||||
| Net income | $ | 218,330 | $ | 35,383 | $ | 259,523 |
| Adjustments to reconcile net income |
Source: Item 21 — Financial Statements (FDD page 56)
What This Means (2025 FDD)
According to Antioch Pizza Shop's 2025 Franchise Disclosure Document, the change in accounts receivable in 2024 was a decrease of $22,400. This figure is part of the adjustments made to reconcile net income to net cash provided by operating activities. In 2023 and 2022, there was no change in accounts receivable.
Accounts receivable are amounts due to Antioch Pizza Shop based on franchise agreements for royalties and marketing fees. These receivables are recorded at the original invoice amount, with an allowance for doubtful receivables based on a review of outstanding amounts. The company adopted ASC 326, using the Current Expected Credit Losses (CECL) model to estimate credit losses over the life of the financial instrument.
For a prospective franchisee, this indicates how Antioch Pizza Shop manages its receivables and accounts for potential losses. The decrease in accounts receivable in 2024 suggests that the company collected a significant portion of its outstanding invoices during that year. The absence of accounts receivable in 2023 and 2022, followed by $22,400 in 2024, could signal changes in Antioch Pizza Shop's franchise agreement terms or collection practices. A potential franchisee should inquire about the reasons for these fluctuations and the company's credit policies.