What was the change in accounts receivable for Craters & Freighters in 2024?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
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| Years Ended December 31, | 2024 | 2023 |
|---|---|---|
| Change in Cash and Cash Equivalents: | ||
| Cash Flows from Operating Activities: | ||
| Net Income | $ 1,355,336 $ | 2,633,230 |
| Adjustments to Reconcile Net Income to Net Cash and Cash Equivalents | ||
| From Opera |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the change in accounts receivable in 2024 was a decrease of $102,546. In 2023, there was an increase in accounts receivable of $138,330. This information is derived from the statement of cash flows, which reconciles net income to net cash and cash equivalents.
Accounts receivable represents the money owed to Craters & Freighters by its customers for goods or services delivered but not yet paid for. A decrease in accounts receivable typically suggests that Craters & Freighters collected more cash from its customers during 2024 compared to 2023, or that sales on credit decreased.
For a prospective franchisee, monitoring changes in accounts receivable is crucial. A significant decrease could indicate more efficient cash collection processes, while a large increase might signal potential issues with customers not paying on time. Understanding these trends can help franchisees manage their own cash flow and financial health.
It's also important to note that Craters & Freighters maintains an allowance for credit losses, which was $20,000 in 2024 and $50,000 in 2023. This allowance reflects management's estimate of potential uncollectible accounts, further impacting the net realizable value of accounts receivable.