What was the change in accounts receivable for Counselor Realty in 2022?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
December 31, 2024, 2023 and 2022
| 2024 | 2023 | 2022 | ||
|---|---|---|---|---|
| Cash Flows From Operating Activities | ||||
| Net income (loss) | $ (3,967) | $ | (8,873) | $ 11,780 |
| Adjustments to reconcile net income (loss) to net cash | ||||
| flows from operating activities: | ||||
| Interest income earned on certificate of deposit | (977) | (280) | - | |
| Changes in operating assets and liabilities: | ||||
| Accounts receivable | 1,574 | 1,504 | (662) | |
| Due to franchise | 50 | - | - | |
| Due to parent company | - | - | (500) | |
| Net cash flows from operating activities | (3,320) | (7,649) | 10,618 | |
| Cash Flows From Investing Activities | ||||
| Purchase of certificates of deposit | (136,814) | (130,000) | - | |
| Redemption of certificates of deposit | 130,280 | - | - | |
| Net cash flows from investing activities | (6,534) | (130,000) | - | |
| Increase (decrease) in cash | (9,854) | (137,649) | 10,618 | |
| Cash, Beginning | 80,311 | 217,960 | 207,342 | |
| Cash, Ending | $ |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 32)
What This Means (2025 FDD)
According to Counselor Realty's 2025 Franchise Disclosure Document, the accounts receivable decreased by $662 in 2022. This figure is derived from the statement of cash flows, which tracks changes in operating assets and liabilities, including accounts receivable.
Accounts receivable for Counselor Realty primarily consist of franchise-related fees. These receivables are unsecured, and the company charges an 8% interest on past-due accounts. The company writes off accounts receivable when they are deemed uncollectible. The change in accounts receivable reflects the difference between the amount of franchise fees billed and the amount collected during the year.
For a prospective franchisee, this information provides insight into the financial management and cash flow trends of Counselor Realty. A decrease in accounts receivable could indicate more efficient collection of franchise fees, while an increase might suggest potential challenges in collecting payments from franchisees. Reviewing these trends over several years, as presented in the FDD, can offer a more comprehensive understanding of the company's financial health and stability.
It's important to note that the allowance for credit losses, which represents the company's estimate of uncollectible accounts, was $1,574 and $3,724 as of December 31, 2024, and 2023, respectively. This allowance is a contra-asset account that reduces the gross amount of accounts receivable to its net realizable value. Monitoring the changes in both accounts receivable and the allowance for credit losses can provide a more accurate picture of the company's financial performance.