What is the difference in Accounts Receivable (net of allowance) between 2023 and 2024 for Craters & Freighters?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
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| As of December 31, | 2024 | 2023 |
|---|---|---|
| Current Assets: | ||
| Cash and Cash Equivalents | $ 5,342,958 $ | 6,991,649 |
| Marketable Securities - At Fair Market Value | 780,245 | 634,869 |
| Accounts Receivable - Net of Allowance for | ||
| Credit Losses of $20,000 and $50,000, Respectively | 702,206 | 569,660 |
| Ot |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the net accounts receivable, which factors in allowances for credit losses, was $569,660 in 2023 and $702,206 in 2024. This represents an increase of $132,546 in net accounts receivable from 2023 to 2024.
Accounts receivable represents the money owed to Craters & Freighters by its customers for goods or services already provided. The 'allowance for credit losses' is an estimate of the amount of accounts receivable that Craters & Freighters does not expect to collect. Subtracting this allowance provides a more realistic view of the company's expected cash inflows.
For a prospective franchisee, an increase in accounts receivable could indicate business growth and higher sales volume. However, it's also important to consider the allowance for credit losses. A significant increase in this allowance could suggest that a larger portion of the receivables may not be collectible, potentially impacting the franchisee's cash flow. Reviewing these figures over several years can provide a better understanding of the trend and the effectiveness of Craters & Freighters' credit and collection policies.
It is important to note that the allowance for credit losses was $50,000 in 2023 and $20,000 in 2024. This decrease in allowance for credit losses from 2023 to 2024 could indicate that Craters & Freighters expects to collect a higher percentage of its outstanding receivables in 2024 compared to 2023.