What was the bad debt expense for City Wide in 2024?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
| - | | - | - | | 39,507 | 39,507 | | Distributions | | | | | | | (16,582,517) | | | (16,582,517) | | Balance December 31, 2024 | $ | 2,100 | $ | 210,000 | $ | 366,366 | $ 13,031,512 | $ | 54,347 | $ 13,664,325 |
City Wide Franchise Company, Inc. & Subsidiaries Consolidated Statements of Cash Flows Years Ended December 31, 2024, 2023, and 2022
| | 2024 | 2023 | 2022 | |--------------------------------------------------------------------------------------------------------------------------------------------
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the bad debt expense for the year 2024 was $160,526. Bad debt expense represents the amount of accounts receivable that City Wide estimates will not be collected. This expense is an operating activity that impacts the net cash provided by operating activities.
For a prospective franchisee, understanding the bad debt expense is important as it reflects the credit risk associated with City Wide's customers. A higher bad debt expense could indicate a higher risk of non-payment from clients, which could affect the franchisee's revenue and profitability. Monitoring this expense over time can provide insights into the financial health and stability of City Wide's customer base.
In 2023 and 2022, City Wide's bad debt expenses were $54,103 and $13,153, respectively. The increase in bad debt expense from $54,103 in 2023 to $160,526 in 2024 represents a significant increase year-over-year. This could be due to various factors such as changes in credit policies, economic conditions, or the financial stability of City Wide's customers. A prospective franchisee should inquire about the reasons for this increase and how City Wide manages its credit risk.
It is also worth noting that City Wide makes estimates for the expected amount of accounts and notes receivable to be uncollectible, and these amounts are subject to change based on customer circumstances. This means that the actual bad debt expense could differ from the estimated amount. Franchisees should be aware of this uncertainty and factor it into their financial planning.