What was the depreciation expense 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 Operating Income: | ||
| Amortization Expense | 116,969 | 101,989 |
| Depreciation Expense | 42,021 | 26,134 |
| Gain on Sale of Property and Equipment | - | (15,729) |
| Gain on Sale of Marketable Securities | (26) | (841) |
| Credit Losses (Recovery) | (30,000) | 10,000 |
| Non-Cash Lease Expense | 1,087 | 1,865 |
| Unrealized Holding (Gain) Loss on Marketable Securities | (135,511) | (97,174) |
| Reinvested Dividends | (14,734) | (13,827) |
| (Increase) Decrease in Assets: | ||
| Accounts Receivable | (102,546) | 138,330 |
| Prepaid Expenses | (33,459) | (166,615) |
| Other Receivable | (132,658) | - |
| Inventories | (7,592) | - |
| Notes Receivable | (16,991) | - |
| (Decrease) Increase in Liabilities: | ||
| Accounts Payable | 120,434 | (179,894) |
| Accrued Bonus | - | (132,340) |
| Accrued Wages and Other Liabilities | 30,492 | 1,332 |
| Due to Related Party | 65,000 | |
| Net Cash Flows from Operating Activities | 1,257,822 | 2,306,460 |
| Cash Flows from Investing Activities: | ||
| Investment in Software Development | (160,289) | (113,648) |
| Proceeds from Sale of Investments | 83 | 77,025 |
| Purchase of Investments | (1,160) | (71,427) |
| Payments from (Advances to) Related Party | 356,391 | (163,077) |
| Note Receivable - Former Employee | - | (100,000) |
| Purchase of Property and Equipment | (22,247) | (89,688) |
| Net Cash Flows from Investing Activities | 172,778 | (460,815) |
| Cash Flows from Financing Activities: | ||
| Distributions to Shareholder | (309,603) | - |
| (Payments to) Advances from Shareholder | (2,769,688) | 2,769,688 |
| Net Cash Flows from Financing Activities | (3,079,291) | 2,769,688 |
| Net Increase (Decrease) in Cash and Cash Equivalents | (1,648,691) | 4,615,333 |
| Cash and Cash Equivalents at Beginning of Year | 6,991,649 | 2,376,316 |
| Cash and Cash Equivalents at End of Year | $ 5,342,958 $ | 6,991,649 |
Note 1: Summary of Significant Accounting Policies
Nature of Operations
Craters & Freighters Franchise Company (the Company) was formed in September of 1991 in Colorado.
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 year ending December 31, 2024, was $42,021. This figure reflects the accounting method of allocating the cost of tangible assets over their useful life, indicating the wear and tear or obsolescence of Craters & Freighters' assets used in its operations. 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 franchisee, understanding depreciation expense is crucial as it provides insights into the capital intensity of the business and how Craters & Freighters manages its assets. Higher depreciation expenses might suggest that the company has significant investments in equipment or property that are being actively used. It's also important to consider that depreciation methods and rates can vary, impacting the reported expense.
Franchisees should compare the depreciation expense with those of similar companies or previous years to assess whether the expense is reasonable and aligns with industry standards. Furthermore, understanding the nature of the depreciated assets can provide a clearer picture of the company's operational investments and potential future capital expenditure needs. Reviewing these figures in the context of Craters & Freighters' overall financial health can help potential franchisees make informed decisions.