What was the reported accounts receivable balance at the beginning of 2023 for City Wide?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
ars ended December 31, 2024, 2023, and 2022.
The Company has determined that the nature, amount, timing and uncertainty of revenue and cash flows are primarily affected by the enterprise size of the customer.
Contract Balances
The following table provides information about the Company's receivables and deferred revenue from contracts with customers:
| 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 accounts receivable balance at the beginning of 2023 was reported as $4,120,583. This figure represents the amount of money that was owed to City Wide by its customers as of January 1, 2023. Accounts receivable are a crucial asset for any business, as they reflect the revenue that has been earned but not yet collected.
For a prospective City Wide franchisee, understanding the accounts receivable balance is important for assessing the financial health and stability of the company. A higher accounts receivable balance may indicate strong sales performance, but it could also suggest potential issues with collecting payments from customers. Franchisees should inquire about City Wide's policies and procedures for managing accounts receivable, including credit terms, collection efforts, and write-off practices.
It's also worth noting that the FDD includes details about City Wide's allowance for credit losses, which is an estimate of the amount of accounts receivable that may be uncollectible. This allowance is subject to change based on customer circumstances and economic conditions, highlighting the inherent uncertainty in predicting future collections. Franchisees should consider this allowance when evaluating the overall quality of City Wide's accounts receivable and the potential risk of bad debts.
Reviewing the trend in accounts receivable balances over time, as presented in the table, can provide further insights into City Wide's financial performance and working capital management. Comparing the beginning and ending balances for each year can reveal whether the company is effectively managing its collections and maintaining a healthy cash flow. A significant increase in accounts receivable without a corresponding increase in revenue could be a red flag, warranting further investigation.