What was the bad debt expense for Craters & Freighters in 2023?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
| 5,413,239 | $ 5,414,139 |
Statements of Cash Flows
| Years Ended December 31, | 2023 | 2022 |
|---|---|---|
| Change in Cash and Cash Equivalents: | ||
| Cash Flows from Operating Activities: | ||
| Net Income | $ 2,633,230 $ | 2,437,747 |
| Adjustments to Reconcile Net Income to Net Cash and Cash Equivalents | ||
| From Operating Income: | ||
| Amortization Expense | 101,989 | 99,763 |
| Depreciation Expense | 26,134 | 21,995 |
| Gain on Sale of Fixed Assets | (15,729) | - |
| Gain on Sa |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to the 2025 FDD, Craters & Freighters had a bad debt expense of $10,000 in 2023. Bad debt expense represents the amount of accounts receivable that Craters & Freighters estimates will not be collected. This expense is an important indicator of the credit risk Craters & Freighters faces and its effectiveness in managing collections.
For a prospective franchisee, understanding the bad debt expense can provide insights into the financial health and risk management practices of Craters & Freighters. A lower bad debt expense may indicate more effective credit policies or a customer base with better payment behavior. Conversely, a higher bad debt expense could signal potential issues with customer solvency or collection efforts.
It is important to note that bad debt expense can fluctuate from year to year due to various factors, including economic conditions and changes in Craters & Freighters's credit policies. Therefore, it is advisable for potential franchisees to review the trend of bad debt expense over several years to gain a more comprehensive understanding of the company's financial performance and risk profile. Comparing this expense to industry benchmarks can also provide valuable context.