What was the change in Cicis' accrued expenses and other current liabilities in 2023?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2023 | 2022 | ||
|---|---|---|---|
| Cash flows from operating activities: | |||
| Net income | $ 5,859,705 | $ 9,407,023 | |
| Adjustments to reconcile net income to net cash | |||
| provided by operating activities: | |||
| Amortization | 13,149 | 13,149 | |
| Changes in operating assets and liabilities: | |||
| Trade receivables | 186,610 | (73,448) | |
| Marketing fund, restricted | (1,307,025) | 1,045,443 | |
| Related party receivable | 753,587 | (502,090) | |
| Prepaid expenses and other current assets | 41,682 | 532,467 | |
| Other receivables | (2,952) | 226,453 | |
| Accounts payable | 305,641 | 90,785 | |
| Accounts payable—marketing fund, restricted | 182,889 | (636,450) | |
| Accrued expenses and other current liabilities | (754,380) | 668,395 | |
| Deferred franchise fees | 233,291 | 325,663 | |
| Related party payable | 427,267 | (49,523) | |
| Marketing fund liabilities, restricted | 1,407,044 | (2,623,924) | |
| Other noncurrent liabilities | (789,083) | (775,153) | |
| Net cash provided by operating activities | 6,557,425 | 7,648,790 |
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis' 2025 Franchise Disclosure Document, the accrued expenses and other current liabilities decreased by $754,380 in 2023. This figure is derived from the cash flow statement, which reconciles net income to net cash provided by operating activities. The change in accrued expenses and other current liabilities is one of the adjustments made to net income to arrive at the net cash flow.
For a prospective Cicis franchisee, this decrease could indicate a few things. It might mean that Cicis paid off more of its short-term liabilities during the year, or it could reflect a change in how the company accounts for these expenses. Accrued expenses typically include items like wages, salaries, taxes, and utilities that have been incurred but not yet paid. A decrease in these liabilities could be a positive sign of improved financial management.
However, it's essential to consider this change in the context of Cicis' overall financial performance. A significant decrease in accrued expenses could also be a one-time event or related to specific circumstances in 2023. Franchisees should look at trends over several years to get a better understanding of how Cicis manages its short-term obligations. It would be prudent for potential franchisees to discuss this decrease with Cicis to understand the underlying reasons and implications for the company's financial health.
Understanding these changes in liabilities can help a franchisee assess the financial stability of Cicis. While a decrease in accrued expenses might seem positive, it's crucial to investigate the reasons behind it and how it aligns with the overall financial strategy of the company. This information, combined with other financial metrics, can provide a more comprehensive view of the franchise's financial standing.