What was the value of Auntie Annes' accounts receivable, net of allowance for credit losses, in 2023?
Auntie_Annes Franchise · 2024 FDDAnswer from 2024 FDD Document
m throughout the audit.
- Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial do
Source: Item 23 — RECEIPTS (FDD pages 106–366)
What This Means (2024 FDD)
According to Auntie Annes' 2024 Franchise Disclosure Document, the value of accounts receivable, net of allowance for credit losses, was $37,049 as of December 31, 2023. The allowance for credit losses that was deducted from the gross accounts receivable to arrive at this net figure was $1,143 in 2023.
Accounts receivable primarily consist of amounts due from Auntie Annes franchisees, vendors, licensees, and gift card retailers. The financial health of these franchisees and licensees is closely tied to the performance of Auntie Annes' brands and the overall conditions in the quick-service restaurant industry, both in the United States and internationally. This creates a concentration of credit risk, but it is somewhat mitigated by the large number of franchisees and the short-term nature of the receivables.
Auntie Annes determines the allowance for credit losses based on several factors, including the aging of customer receivables, write-off history, the financial condition of its franchisees, licensees, and vendors, and current economic conditions. Accounts receivable are written off when it is probable that they will not be recovered. The ultimate recovery of these receivables depends on future economic events and other conditions that may be beyond the company's control.