What was the income (loss) before taxes for Cornwell Quality Tools?
Cornwell_Quality_Tools Franchise · 2025 FDDAnswer from 2025 FDD Document
20,451,381 | $ (773,260) | $ - | $ 19,678,121 |
CONSOLIDATING STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2022
| Cornwell Quality Tools Company | CQT Kennedy, LLC | Eliminations | Consolidated | |
|---|---|---|---|---|
| SALES Less: Dealer weekly volume incentives | $ 251,915,684 4,853,504 | $ 22,648,171 | $ (12,862,937) | $ 261,700,918 4,853,504 |
| Sales - Net | 247,062,180 | 22,648,171 | (12,862,937) | 256,847,414 |
| COST OF GOODS SOLD | 178,516,201 | 23,648,832 | (12,862,937) | 189,302,096 |
| Gross profit | 68,545,979 | (1,000,661) | - | 67,545,318 |
| EXPENSES | ||||
| Shipping and warehousing | 6,300,877 | 2,300 | 6,303,177 | |
| Selling | 21,791,074 | 646,761 | 22,437,835 | |
| General and administrative | 13,068,550 | 1,259,995 | - | 14,328,545 |
| Employee stock ownership plan contribution | 5,000,000 | - | - | 5,000,000 |
| Goodwill amortization expense | - | 848,375 | - | 848,375 |
| Total expenses | 46,160,501 | 2,757,431 | - | 48,917,932 |
| Income (loss) before financing operations | 22,385,478 | (3,758,092) | • | 18,627,386 |
| FINANCING OPERATIONS | ||||
| Revenues | 19,598,514 | - | - | 19,598,514 |
| Other financing income | 1,069,676 | 1,069,676 | ||
| Total financing income | 20,668,190 | - | - | 20,668,190 |
| Expenses | 7,213,203 | _ | · · | 7,213,203 |
| Income from financing operations | 13,454,987 | _ | _ | 13,454,987 |
| Income (loss) from operations | 35,840,465 | (3,758,092) | - | 32,082,373 |
| OTHER INCOME (EXPENSE) | ||||
| Interest expense | (239,390) | (8,261) | - | (247,651) |
| Interest income | 325,161 | - | 325,161 | |
| Other expense - Net | (65,670) | (200) | - | (65,870) |
| Other income (expense) - Net | 20,101 | (8,461) | _ | 11,640 |
| Income (loss) before taxes | 35,860,566 | (3,766,553) |
Source: Item 23 — RECEIPT (FDD pages 101–373)
What This Means (2025 FDD)
According to Cornwell Quality Tools' 2025 Franchise Disclosure Document, the income (loss) before taxes is detailed in the consolidated income statement. For the Cornwell Quality Tools Company itself, the income before taxes was $35,860,566, while CQT Kennedy, LLC, a subsidiary, experienced a loss before taxes of $3,766,553. After eliminations, the consolidated income before taxes for Cornwell Quality Tools was $32,094,013.
For a prospective franchisee, understanding the income before taxes provides insight into the overall profitability of Cornwell Quality Tools' operations. It's important to note that the consolidated income includes the performance of both the parent company and its subsidiary, offering a comprehensive view of the company's financial health. The difference between the parent company's income and the consolidated income reflects the impact of the subsidiary's loss and any intercompany transactions that have been eliminated.
It is also important to consider the provision for income taxes, which for the consolidated entity totaled $8,204,498. This figure, when subtracted from the income before taxes, results in a net income of $23,889,515. Reviewing these figures helps potential franchisees assess the tax implications and the ultimate profitability of the company.
Prospective franchisees should analyze these figures in conjunction with other financial statement data, such as revenues, expenses, and cost of goods sold, to gain a complete understanding of Cornwell Quality Tools' financial performance and stability. Additionally, it would be prudent to investigate the reasons behind CQT Kennedy, LLC's loss before taxes and how it impacts the overall consolidated results.