What was the amount of unearned revenue for Caring Transitions in 2022?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
,000) | (1,947,499) | (1,092,501) | | Retained earnings, ending | $ 1,940,228 | 924,955 | 543,380 |
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Cash flows from operating activities | $ 2,720,273 | 2,329,074 | 1,017,523 |
| Net income | |||
| Adjustment to reconcile net income to net cash | |||
| provided by operating activities: | |||
| Depreciation | 114,120 | 109,265 | 78,898 |
| Non-cash lease expense | 5,721 | (944) | 1,350 |
| Net change in assets and liabilities: | (173,605) | (143,068) | 4,928 |
| Accounts receivable | |||
| Other receivable | - | 6,463 | (6,463) |
| Deposit - payroll | - | - | 30,396 |
| Franchise contract asset | (85,147) | (68,345) | (25,712) |
| Accounts payable | (7,503) | 29,975 | 54,536 |
| Unearned revenue | 354,190 | (199,510) | 279,820 |
| Franchise contract liability | 336,556 | 244,898 | 144,805 |
| Accrued expenses | (38,412) | (3,203) | 139,062 |
| Net cash provided by operating activities | 3,226,193 | 2,304,605 | 1,719,143 |
| Cash flows from investing activities | |||
| Property and equipment purchased | (294,719) | (300,360) | (401,836) |
| Net cash used by investing activities | (294,719) | (300,360) | (401,836) |
| Cash flows from financing activities | |||
| Repayment of notes payable | (32,159) | (31,209) | (30,282) |
| Distributions | (1,705,000) | (1,947,499) | (1,092,501) |
| Net cash used by financing activities | (1,737,159) | (1,978,708) | (1,122,783) |
| Change in cash and restricted cash | 1,194,315 | 25,537 | 194,524 |
| Cash and restricted cash at beginning of year | 1,120,470 | 1,094,933 | 900,409 |
| Cash and restricted cash at end of year | $ 2,314,785 | 1,120,470 | 1,094,933 |
| Supplementary information: | |||
| Cash paid for interest | $ 804 | 1,753 | 3,734 |
| Cash and restricted cash: | |||
| Cash | $ 2,075,001 | 949,879 | 979,239 |
| Restricted cash | 239,784 | 170,591 | 115,694 |
| Total cash and restricted cash | $ 2,314,785 | 1,120,470 | 1,094,933 |
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Business activity
C. T. Franchising Systems, Inc. (the Company) is an S-corporation organized under the laws of the State of Ohio on April 20, 2006.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, the unearned revenue for the company in 2022 was $279,820. Unearned revenue represents payments Caring Transitions has received for goods or services that have not yet been provided. This is a common accounting practice, especially in franchise systems where initial franchise fees or ongoing royalties may be collected before the services are fully rendered.
For a prospective Caring Transitions franchisee, understanding unearned revenue is crucial because it reflects the company's financial obligations to its franchisees. A significant increase in unearned revenue could indicate rapid franchise sales or changes in payment terms, while a decrease might suggest that Caring Transitions is fulfilling its obligations and recognizing revenue.
It is important to note that unearned revenue is a liability on the balance sheet, representing a future obligation. For Caring Transitions, this obligation typically involves providing training, support, and other services to new and existing franchisees. Monitoring the trend of unearned revenue alongside revenue recognition provides insights into the company's operational efficiency and financial health.