What was the bad debt expense for Chem Dry in the first year presented?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
| Consolidated net (loss) income | $(44,277) $ | (6,330) $ | 2,941 | |
|---|---|---|---|---|
| Adjustments to reconcile consolidated net (loss) income to net | ||||
| cash from operating activities: | ||||
| Depreciation | 591 | 490 | 443 | |
| Amortization of intangible assets | 4,380 | 5,169 | 5,446 | |
| Bad debt expense | 627 | 6,949 | 2,990 | |
| Loss on disposal of property and equipment | - | - | 27 | |
| Impairment of goodwill | 45,537 | 1,266 | - | |
| Impairment of intangible assets | - | 4,952 | - | |
| Deferred income taxes | 265 | (2,595) | 795 | |
| Noncash lease expense | (121) | (44) | 100 | |
| Changes in operating assets and liabilities that provided | ||||
| (used) cash: | ||||
| Accounts receivable | 1 | (3,560) | (1,288) | |
| Inventory | (1,289) | (1,523) | (218) | |
| Notes receivable | 1,506 | 3,607 | 2,550 | |
| Prepaid expenses and other assets | (166) | 473 | (167) | |
| Deferred commissions | 284 | (92) | (461) | |
| Related party | (845) | (7,1 |
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem-Dry's 2024 Franchise Disclosure Document, the bad debt expense for the first year presented was $627. This figure represents the amount of accounts receivable that Chem-Dry estimates will not be collected. Bad debt expense is an important factor in assessing a company's financial health, as it reflects the credit risk associated with its customers.
For a prospective Chem-Dry franchisee, understanding the bad debt expense can provide insights into the financial stability of the company. A lower bad debt expense may indicate more effective credit management and a healthier customer base. Conversely, a higher bad debt expense could suggest potential issues with customer payment behavior or credit policies.
It is important to note that this figure is specific to Chem-Dry's operations and may not be directly comparable to other franchises or businesses. Franchisees should consider this information in conjunction with other financial data and market research to make informed decisions about their investment.