What was the net value of City Wide's accounts receivable, after allowance, as of December 31, 2024?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
nancial Statements December 31, 2024, 2023, and 2022**
Note 10. Subsequent Events
Subsequent events have been evaluated through March 20, 2025, which is the date the consolidated financial statements were available to be issued.
City Wide Franchise Company, Inc. & Subsidiaries Consolidating Schedule – Balance Sheet December 31, 2024
| City Wide Franchise Company, Inc. | City Wide Franchise of Canada, Inc. | City Wide Franchise International, Inc. | Eliminating Entries | 2024 Consolidated |
|---|
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the consolidated balance sheet as of December 31, 2024, shows the net accounts receivable after allowance. For City Wide Franchise Company, Inc., the accounts receivable, net of allowance for 2024, was $6,233,968. For City Wide Franchise of Canada, Inc., the accounts receivable, net of allowance, was $223,313. City Wide Franchise International, Inc. had no listed value. After eliminating entries of ($1,067,650), the consolidated total for accounts receivable, net of allowance, was $5,389,631. The allowance for credit losses that was subtracted from the gross accounts receivable to arrive at the net figure was $158,554 for 2024.
This means that City Wide estimates that $158,554 of its accounts receivable may not be collectible. This estimate is based on a review of outstanding receivables, historical collection information, and existing economic conditions. The net accounts receivable figure is the amount that City Wide expects to collect from its customers. For a prospective franchisee, this indicates the level of risk City Wide perceives in collecting its outstanding invoices. It also shows the importance of a franchisee's ability to manage credit and collections effectively.
It is important to note that the allowance for credit losses is an estimate, and the actual amount of uncollectible accounts may differ. City Wide's accounting policies state that delinquent receivables are written off based on individual credit evaluation and specific circumstances of the customer. This means that City Wide will continue to monitor its accounts receivable and write off any amounts that are deemed uncollectible. The FDD also states that during the years ended December 31, 2024, 2023, and 2022, credit loss expense related to doubtful accounts receivable, where collectability is not reasonably assured, was $160,526, $54,103, and $13,153, respectively.
Prospective franchisees should consider the creditworthiness of City Wide's customers and the potential for uncollectible accounts when evaluating this franchise opportunity. Understanding how City Wide manages its accounts receivable and allowance for credit losses can provide valuable insights into the financial health and stability of the company.