What was the depreciation amount for Caring Transitions in 2024?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
that we identified during the audit.
Clark, Schaefer, Hackett & Co.
Cincinnati, Ohio March 24, 2025
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Assets | |||
| Current assets: | |||
| Cash | $ 2,075,001 | 949,879 | 979,239 |
| Restricted cash | 239,784 | 170,591 | 115,694 |
| Accounts receivable | 706,468 | 532,863 | 389,795 |
| Other receivables | - | - | 6,463 |
| 3,021,253 | 1,653,333 | 1,491,191 | |
| Property and equipment: | |||
| Internal-use software costs | 1,277,414 | 982,694 | 682,334 |
| Computer equipment | 30,428 | 30,428 | 30,428 |
| Leasehold improvements | 40,610 | 40,610 | 40,610 |
| 1,348,452 | 1,053,732 | 753,372 | |
| Accumulated depreciation | (367,508) | (253,387) | (144,122) |
| 980,944 | 800,345 | 609,250 | |
| Other assets: | |||
| Franchise contract asset | 279,182 | 194,035 | 125,690 |
| Operating right-of-use asset | 485, |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, the accumulated depreciation for the company in 2024 was $367,508. This figure reflects the total depreciation recognized on the company's assets up to December 31, 2024. Accumulated depreciation is a contra-asset account that reduces the book value of assets on the balance sheet.
For a prospective Caring Transitions franchisee, understanding depreciation is important for assessing the financial health and asset management practices of the franchisor. The increase in accumulated depreciation from $253,387 in 2023 to $367,508 in 2024 indicates that Caring Transitions has continued to invest in depreciable assets like internal-use software, computer equipment, and leasehold improvements. These assets are essential for supporting the franchise network and delivering services.
The FDD also notes that Caring Transitions depreciates its fixed assets using the straight-line method over an estimated useful life ranging from five to fifteen years. This method evenly distributes the cost of the asset over its useful life. Reviewing the depreciation method and asset lives can provide insight into how the franchisor manages its assets and reports its financial performance. Franchisees may want to inquire about the specific types of assets being depreciated and their impact on the company's profitability.
It is important to note that depreciation is a non-cash expense, meaning it does not involve an actual outflow of cash. However, it does reduce the company's taxable income, which can result in tax savings. Franchisees should consult with a financial advisor to understand the tax implications of depreciation and how it affects their own financial situation.