How much depreciation expense did City Publications record in 2023?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
shares issued and outstanding | 1,000 | 1,000 | | | Additional paid-in capital | 17,000 | 17,000 | | | Retained earnings | 1,902,107 | 1,745,483 | | | Due from affiliates | (1,994,105) | (1,849,093) | | | TOTAL SHAREHOLDERS' (DEFICIT) | (73,998) | (85,610) | | | TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) | $ 486,618 | $ 55,916 | |
The accompanying notes are an integral part of these financial statements.
CITY PUBLICATIONS FRANCHISE GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
| FOR THE YEARS ENDED DECEMBER 31, | ||||
|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||
| REVENUES | ||||
| Franchise fees | $ 624,453 | $ 305,073 | $ 226,598 | |
| Royalty fees | 165,720 | 236,040 | 239,415 | |
| Other revenues | 322,271 | 445,561 | 448,915 | |
| Management fees | 300,827 | 285,828 | 225,539 | |
| TOTAL REVENUES | 1,413,271 | 1,272,502 | 1,140,467 | |
| OPERATING EXPENSES | ||||
| Compensation and related costs | 561,870 | 555,064 | 505,806 | |
| General and administrative | 274,238 | 328,368 | 457,315 | |
| Franchise related costs | 244,917 | 212,220 | 150,427 | |
| Advertising and promotion | 29,375 | 32,623 | 15,369 | |
| Professional fees | 26,418 | 41,310 | (4,174) | |
| Bad Debt expense | 312 | - | 26,102 | |
| Depreciation expense | 3,000 | 3,000 | 3,000 | |
| TOTAL OPERATING EXPENSES | 1,140,130 | 1,172,585 | 1,153,845 | |
| OPERATING INCOME | 273,141 |
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, the company recorded $3,000 in depreciation expense for the year ended December 31, 2023. Depreciation expense represents the allocation of the cost of tangible assets over their useful lives. This accounting practice allows City Publications to match the expense of using these assets with the revenue they generate.
For a prospective franchisee, understanding depreciation expense is important for assessing the overall financial health and profitability of City Publications. While $3,000 is a relatively small amount, it indicates that the company owns some depreciable assets, such as equipment or vehicles, which are being used in its operations.
It's worth noting that the depreciation expense remained consistent at $3,000 for the years 2022 and 2024 as well. This consistency could suggest that City Publications' investment in depreciable assets has been stable over these years. A potential franchisee might want to inquire about the nature of these assets and their expected useful lives to gain a better understanding of the company's capital expenditure strategy.