What was the gain on sale of fixed assets 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 |
| De |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to the 2025 FDD, Craters & Freighters experienced a gain on the sale of fixed assets in 2023. The financial statement shows this gain as a negative value, specifically ($15,729). This figure is part of the adjustments made to reconcile net income to net cash flows from operating activities.
In accounting terms, a gain on the sale of fixed assets occurs when Craters & Freighters sells an asset, such as property or equipment, for more than its book value (original cost less accumulated depreciation). However, the FDD presents this gain as a negative number in the context of cash flow reconciliation. This is because the gain is already included in the net income figure, and to accurately reflect the cash flow from operating activities, it needs to be subtracted out.
For a prospective franchisee, this indicates how Craters & Freighters manages its assets and accounts for gains from asset sales. It's a relatively small amount compared to the overall net income of $2,633,230 for 2023, suggesting that gains from asset sales are not a primary driver of revenue. The franchisee should focus more on the overall financial health and operational cash flows of Craters & Freighters, as indicated by the larger figures in the financial statements.