What was the depreciation expense for Craters & Freighters in 2023?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
| As of December 31, 2023 | Cost | Accumulated Depreciation | | Net Book Value | |----------------------------------------------------------------------------------|---------------------------------------------|---------------------------------------------|----|------------------------| | Office Equipment | $ 80,613 | $ 80,613 | $ | - | | Furniture and Fixtures | 19,863 | 19,863 | | - | | Leasehold Improvements | 11,415 | 11,415 | | - | | Vehicles | 202,688 | 21,737 | | 180,951 | | | $ 314,579 | $ 133,628 | $ | 180,951 | | As of December 31, 2022 | Cost | Accumulated Depreciation | | Net Book Value | | Office Equipment | $ 80,613 | $ 80,613 | $ | - | | Furniture and Fixtures | 19,863 | 19,863 | | - | | Leasehold Improvements | 11,415 | 11,415 | | - | | Vehicles | 215,039 | 113,372 | | 101,667 | | | $ 326,930 | $ 225,263 | $ | 101,667 | Depreciation expense for the years ended December 31, 2023 and 2022 was $26,132 and $21,993, respectively.
Note 4: Software Development
Software development assets are carried at historical cost less accumulated amortization and any recognized impairment loss. Software development is amortize
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the depreciation expense for the years ended December 31, 2023, was $26,132. This figure represents the accounting expense recognized by Craters & Freighters to allocate the cost of its tangible assets, like equipment and vehicles, over their useful lives. Depreciation is a non-cash expense, meaning it doesn't involve an actual outflow of cash, but it does reduce the company's reported profit.
For a prospective Craters & Freighters franchisee, understanding depreciation expense can be helpful in assessing the company's profitability and asset management strategies. While the franchisee's own depreciation expenses will depend on their specific assets and investment decisions, reviewing Craters & Freighters' depreciation trends can provide insights into the capital intensity of the business and how the company manages its assets at the corporate level.
It's also worth noting that Craters & Freighters' amortization expense for software development during the same period was $101,989. Amortization is similar to depreciation but applies to intangible assets like software. Both depreciation and amortization are important factors in understanding a company's overall financial performance and should be considered when evaluating the franchise opportunity.