What was the current portion of deferred revenue for Chocolate Bash as of December 31, 2023?
Chocolate_Bash Franchise · 2024 FDDAnswer from 2024 FDD Document
2023 & DECEMBER 31, 2022 & DECEMBER 31, 2021 BALANCE SHEET
| ASSETS | 12/31/23 12/31/22 12/31/21 | ||
|---|---|---|---|
| CURRENT ASSETS | |||
| Cash and Cash Equivalents | $ 21,639 | $ 59,295 | $ 104,922 |
| Accounts Receivable | 2,153 | 21,194 | - |
| TOTAL CURRENT ASSETS | 23,792 | 80,489 | 104,922 |
| NON-CURRENT ASSETS | |||
| Due To/From Related Party | 35,956 | - | - |
| TOTAL NON-CURRENT ASSETS | 35,956 | - | - |
| TOTAL ASSETS | 59,748 | 80,489 | 104,922 |
| LIABILITIES AND OWNER'S EQUITY | |||
| CURRENT LIABILITIES | |||
| Deferred Revenue, current portion | 7,146 | 3,500 | 24,750 |
| TOTAL CURRENT LIABILITIES | 7,146 | 3,500 | 24,750 |
| NON-CURRENT LIABILITIES | |||
| Deferred Revenue | 51,729 | 30,479 | 32,250 |
| TOTAL NON-CURRENT LIABILITIES | 51,729 | 30,479 | 32,250 |
| TOTAL LIABILITIES | 58,875 | 33,979 | 57,000 |
| OWNER'S EQUITY | |||
| Retained Earnings (Deficit) | (14,611) 17,822 | 9,114 | |
| Net Income (Loss) | 15,483 | 28,687 | 38,808 |
| TOTAL SHAREHOLDERS' EQUITY | 872 | 46,509 | 47,922 |
| TOTAL LIABILITIES |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 38)
What This Means (2024 FDD)
According to Chocolate Bash's 2024 Franchise Disclosure Document, the current portion of deferred revenue as of December 31, 2023, was $7,146. Deferred revenue represents payments Chocolate Bash has received for goods or services that have not yet been fully provided or earned. The 'current portion' refers to the amount of this revenue that Chocolate Bash expects to recognize within the next 12 months.
For a prospective Chocolate Bash franchisee, understanding deferred revenue is important because it reflects the company's obligations to provide future services. A higher deferred revenue balance could indicate strong future revenue recognition, while a lower balance might suggest fewer upcoming obligations. In this case, the current portion of deferred revenue is significantly less than the non-current portion, which was $51,729 as of the same date.
It is also useful to compare these figures over time. In 2022, the current portion of deferred revenue was $3,500, and in 2021, it was $24,750. The increase from $3,500 in 2022 to $7,146 in 2023 suggests that Chocolate Bash is collecting more revenue in advance of providing services. Reviewing these trends helps potential franchisees assess the financial stability and future revenue streams of Chocolate Bash.