What was the depreciation expense for Bath Tune Up as of December 31, 2023?
Bath_Tune_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
| December 31, 2024 | December 31, 2023 | |
|---|---|---|
| Cash flows from operating activities: | ||
| Net income $ 1,588,884 $ 2,271,476 | ||
| Adjustments to reconcile Net income to Net cash provided by | ||
| operating activities | ||
| Depreciation 277,279 211,930 | ||
| Amortization of operating right-of-use lease assets 55,233 53,752 | ||
| Provision for credit losses 894,504 630,961 | ||
| Loss on disposal of assets — 3,651 | ||
| Foreign exchange (gain) loss 15,613 (9,062) | ||
| Decrease (increase) in assets: | ||
| Accounts receivable (254,306) (272,177) | ||
| Notes receivable (224,976) (460,630) | ||
| Rebates receivable 73,413 129,675 | ||
| Prepaid expenses 5,025 109,994 | ||
| Other current assets 11,379 10,096 | ||
| Other assets (4,000) — | ||
| Increase (decrease) in liabilities: | ||
| Accounts payable 312,705 (155,708) | ||
| Accrued liabilities (39,319) 33,690 | ||
| Operating lease liability (57,206) (59,809) | ||
| Advertising advances and deposits (146,679) (196,847) | ||
| Deferred revenue 27,529 (513,538) | ||
| Net cash provided by operating activities 2,535,078 1,787,454 | ||
| Cash flows from investing activities: | ||
| Purchase of property and equipment (174,417) (214,252) | ||
| Net cash used in investing activities (174,417) (214,252) | ||
| Cash flows from financing activities: | ||
| Advances to Parent (5,616,409) (5,067,710) | ||
| Allocations from Parent 3,716,061 3,671,090 | ||
| Net cash used in financing activities (1,900,348) (1,396,620) | ||
| Net increase in cash 460,313 176,582 | ||
| Cash at beginning of period 1,838,918 1,662,336 | ||
| Cash at end of period $ 2,299,231 $ 1,838,918 | ||
| Supplemental cash flow information: | ||
| Accrued capital expenditures $ 1,216 $ — | ||
| Transfer of property and equipment from Parent 135,536 — |
Source: Item 23 — RECEIPTS (FDD pages 52–222)
What This Means (2025 FDD)
According to Bath Tune Up's 2025 Franchise Disclosure Document, the depreciation expense as of December 31, 2023, was $211,930. This figure reflects the reduction in value of Bath Tune Up's assets over time, which is a standard accounting practice to allocate the cost of assets like equipment and buildings over their useful lives. Depreciation is a non-cash expense, meaning it doesn't involve an actual outflow of cash, but it does affect the company's reported net income.
For a prospective franchisee, understanding depreciation is important because it impacts the financial statements they will receive and use to evaluate the business's performance. While franchisees don't directly manage the depreciation of Bath Tune Up's overall assets, this figure provides insight into the company's capital investments and how they are being accounted for. It's a component of the broader financial picture that helps assess the company's profitability and cash flow.
Depreciation can also indirectly affect franchisees. For example, if Bath Tune Up is making significant investments in new technologies or equipment, higher depreciation expenses might be expected. This could signal that the company is committed to innovation and providing franchisees with updated tools and resources. However, it's essential to consider depreciation in conjunction with other financial metrics to get a comprehensive understanding of the company's financial health and strategic direction.