What was the change in accounts payable and accrued expenses for Brain Balance in 2022?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
| Years Ended December 31, 2024, 2023, and 2022 | ||||
|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||
| Cash Flows from Operating Activities | ||||
| Net (loss) income | $(324,837) $ | 161,876 $ | 307,374 | |
| Adjustments to reconcile net (loss) income to net cash and | ||||
| restricted cash from operating activities: | ||||
| Depreciation and amortization | 49,819 | 29,920 | 24,806 | |
| Credit loss expense | 59,741 | 5,560 | - | |
| Changes in operating assets and liabilities that (used) | ||||
| provided cash and restricted cash: | ||||
| Accounts receivable | (126,097) | 42,623 | (75,804) | |
| Deferred franchise costs | 20,050 | 23,393 | 19,952 | |
| Prepaid expenses and other assets | (33,382) | (10,615) | 53,332 | |
| Accounts payable and accrued expenses | (66,584) | (46,246) | 81,063 | |
| Deferred revenue | 16,809 | (89,332) | (96,172) | |
| Accrued advertising expenses | (56,130) | (98,824) | 84,461 | |
| Net cash and restricted cash (used in) provided | ||||
| by operating activities | (460,611) | 18,355 | 399,012 |
Source: Item 23 — RECEIPTS (FDD pages 72–292)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, in 2022, the accounts payable and accrued expenses saw an increase of $81,063. This figure is part of the cash flows from operating activities reported in the financial statement. It reflects the net change in the company's obligations to its suppliers and service providers, as well as accrued liabilities like wages and taxes.
This increase in accounts payable and accrued expenses suggests that Brain Balance may have extended its payment terms with suppliers or deferred certain expense payments during that year. This can be a short-term strategy to manage cash flow, but it's important to consider the context. A significant increase in these liabilities could also indicate growing operational activity or, conversely, potential financial strain if the company is struggling to meet its obligations promptly.
For a prospective franchisee, understanding these changes is crucial. It provides insight into how Brain Balance manages its short-term liabilities and overall cash flow. While a one-year snapshot doesn't tell the whole story, it's a data point to consider alongside other financial metrics and trends. Franchisees should investigate further to determine the reasons behind these changes and assess the potential impact on their own business operations and financial stability.
It is important to note that these figures are from the company's financial statements, which, as stated in Exhibit C of the FDD, have been prepared without an audit. Prospective franchisees should be aware that no independent certified public accountant has audited these figures or expressed an opinion regarding their content or form.