What was the change in deferred costs for Boulder Designs in 2022?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
135,967 | 183,606 | | General and administrative expenses | 1,250,875 | 1,301,065 | 1,266,488 | | | 2,192,873 | 2,251,831 | 2,055,860 | | Operating income (loss) | 136,924 | (662,471) | 108,254 | | Interest expense | (14,073) | (21,578) | (4,884) | | Other expense | (28,000) | (31,696) | (36,241) | | Net income (loss) | 94,851 | (715,745) | 67,129 | | Member's deficit, beginning of year | (3,810,894) | (2,996,967) | (2,779,329) | | Contributions from member | 87,889 | 259,214 | 403,269 | | Distributions to member | (493,883) | (357,396) | (688,036) | | Member's deficit, end of year | $ (4,122,037) | (3,810,894) | (2,996,967) |
Statements of Cash Flows
Years Ended December 31,
| _ | 2024 | 2023 | 2022 | |
|---|---|---|---|---|
| Cash flows from operating activities: | ||||
| Net income (loss) | $ | 94,851 | (715,745) | 67,129 |
| Adjustments to reconcile net income (loss) to net | · | , , , | · | |
| cash from operating activities: | ||||
| Depreciation and amortization | 25,731 | 24,988 | 25,680 | |
| Provision for credit losses | 86,025 | 30,799 | 13,287 | |
| Impairment loss on acquired franchise | ||||
| agreements | 28,000 | 30,000 | 30,000 | |
| Changes in operating assets and liabilities: | ||||
| Franchise fees receivable | 70,103 | (503,303) | (11,365) | |
| Inventory | 61,051 | 27,531 | 21,766 | |
| Deferred costs | 75,212 | (15,134) | (115,101) | |
| Other receivables | (2,932) | (868) | (700) | |
| Trade accounts payable and | ||||
| accrued expenses | 6,111 | (210,366) | 298,101 | |
| Deferred franchise fees | _ | 243,044 | 1,702,881 | 84,557 |
| Net cash provided by operating activities | 687,196 | 370,783 | 413,354 | |
| Cash flows from investing activities: | ||||
| _ | 30,986 | (6,331) | ||
| Advances to (repayments from) related party | - | (20,000) | (204,500) | |
| Payments for acquired franchises Capital expenditures | (8,860) | (20,000) | (8,244) | |
| _ | (0,000) | (0,244) | ||
| Net cash provided by (used in) investing activities | (8,860) | 10,986 | (219,075) | |
| investing activities | _ | (8,800) | 10,780 | (217,075) |
| Cash flows from financing activities: | ||||
| Proceeds from iss |
Source: Item 23 — RECEIPT (FDD pages 50–217)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, the deferred costs decreased by $115,101 in 2022. This figure is derived from the cash flow statement, which reconciles net income to net cash from operating activities. Deferred costs represent expenditures that have been paid but not yet recognized as expenses on the income statement.
For a prospective Boulder Designs franchisee, a decrease in deferred costs could mean that the company recognized more of these previously paid expenses during 2022. This could be due to various factors, such as the amortization of initial franchise fees or the utilization of prepaid services. It's important to note that this is just one line item in the financial statements and should be considered in the context of the overall financial health of Boulder Designs.
Understanding the nature of these deferred costs and the reasons for their change can provide insights into the company's accounting practices and business operations. A potential franchisee should seek clarification from Boulder Designs regarding the specific items included in deferred costs and the factors that contributed to the decrease in 2022. This will help in assessing the sustainability of the company's financial performance and making informed investment decisions.