What was the change in deferred revenue for Chocolate Bash in 2022?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
D DECEMBER 31, 2023 & DECEMBER 31, 2022 & DECEMBER 31, 2021
| 2023 | 2022 | 2021 | |
|---|---|---|---|
| OPERATING ACTIVITIES | |||
| Net Income | $ 15,483 | $ 28,687 | $ 38,808 |
| Non-Cash Adjustments | |||
| Changes in Deferred Revenue | 24,896 | (23,021) | 22,000 |
| Changes in Due From Affiliate | (35,956) | - | 1,250 |
| Changes in Accounts Receivable | 19,041 | (21,194) | - |
| NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES | 23,464 | (15,528) | 62,058 |
| INVESTING ACTIVITIES | |||
| NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES | - | - | - |
| FINANCING ACTIVITIES | |||
| Owner's Contribution (net) | (61,122) | (30,100) | 17,940 |
| NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES | (61,122) | (30,100) | 17,940 |
| NET INCREASE (DECREASE) IN CASH | (37,658) | (45,628) | 79,998 |
| CASH AT BEGINNING OF PERIOD | 59,295 | 104,922 | 24,924 |
| CASH AT |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 38)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the change in deferred revenue for the company in 2022 was a decrease of $23,021. This figure is derived from the Statement of Cash Flows, which provides a summary of the cash inflows and outflows for Chocolate Bash during the years 2021, 2022, and 2023. Deferred revenue represents payments Chocolate Bash has received for goods or services that have not yet been provided or earned.
A decrease in deferred revenue typically indicates that Chocolate Bash recognized more revenue from previously deferred amounts than it received in new deferred payments during that year. This could be due to the company fulfilling obligations related to prior sales, such as initial franchise fees that are recognized over time as the franchise becomes operational.
For a prospective Chocolate Bash franchisee, this information is useful for understanding the company's revenue recognition practices and how deferred revenue impacts its cash flow. It's important to consider the trend in deferred revenue over multiple years to assess the stability and growth of the company's revenue streams. A consistent increase in deferred revenue could signal strong future revenue potential, while fluctuations may warrant further investigation into the company's sales and service delivery cycles.