How did Chem Dry's accounts receivable change from 2022 to 2023?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| Trade receivables | $2,880 | $5,231 | $8,483 |
| Other | 431 | 432 | 864 |
| Less - Allowance for credit losses | 973 | 2,589 | 3,016 |
| Net accounts receivable | $2,338 | $3,074 | $6,331 |
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, the company's net accounts receivable decreased from 2022 to 2023. Specifically, net accounts receivable were $3,074,000 in 2022 and decreased to $2,338,000 in 2023. This represents a decrease of $736,000 in net accounts receivable year-over-year.
This change in accounts receivable could be due to a variety of factors, such as changes in sales, collection practices, or customer payment behavior. It is important to note that these figures are presented with the omission of thousands (000s), meaning the actual values are in the millions of dollars.
A prospective Chem Dry franchisee should consider these figures in the context of the company's overall financial performance and inquire about the reasons for the decrease in accounts receivable. Understanding the factors driving this change can provide valuable insights into the financial health and stability of the Chem Dry franchise system.
Additionally, the FDD notes the company adopted a new accounting pronouncement related to credit losses on financial instruments as of January 1, 2023, which could have impacted the reported accounts receivable figures. Franchisees should be aware of such accounting changes and their potential effects on financial reporting.