What was the change in prepaid expenses 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 Sale of Marketable Securities | (841) | (3,643) |
| Bad Debt Expense | 10,000 | 24,928 |
| Non-Cash Lease Expense | 1,865 | 83,132 |
| Unrealized Holding (Gain) Loss on Marketable Securities | (97,174) | 69,301 |
| Reinvested Dividends | (13,827) | (13,279) |
| (Increase) Decrease in Assets: | ||
| Accounts |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the change in prepaid expenses and deposits for the year ending December 31, 2023, was a decrease of $166,615. This figure is part of the adjustments made to reconcile net income to net cash and cash equivalents from operating income.
Prepaid expenses typically include items like insurance premiums, rent, or advertising costs that Craters & Freighters has paid in advance but not yet fully utilized. A decrease in prepaid expenses suggests that the company used more of these prepaid items during 2023 than it purchased, thereby reducing the balance of prepaid assets on the balance sheet.
For a prospective Craters & Freighters franchisee, understanding these changes in prepaid expenses can offer insights into the company's operational efficiency and cash management practices. Monitoring these figures over time can help assess how effectively Craters & Freighters manages its resources and obligations. Significant fluctuations in prepaid expenses could signal changes in business strategy or financial health, warranting further investigation.