What was the total liabilities and shareholder's equity for Craters & Freighters as of December 31, 2023?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
| $ 9,391,294 $ | 4,370,648 |
Balance Sheets (Continued)
| As of December 31, | 2023 | 2022 |
|---|---|---|
| Current Liabilities: | ||
| Accounts Payable | $ 1,061,526 $ | 1,241,420 |
| Accrued Liabilities | 1,790 | 458 |
| Accrued Bonus | - | 132,340 |
| Operating Lease Liability - Due Within One Year | 76,496 | 73,646 |
| Total Current Liabilities | 1,139,812 | 1,447,864 |
| Long Term Liabilities: | ||
| Due to Shareholder | 2,769,688 | - |
| Operating Lease Liability - Due After One Year | 67,655 | 141,875 |
| Total Long-Term Liabilities | 2,837,343 | 141,875 |
| Total Liabilities | 3,977,155 | 1,589,739 |
| Shareholder's Equity | ||
| Common Stock, No Par Value; 1,000,000 Shares | ||
| Authorized; 1,000,000 Shares Issued and Outstanding | 100 | 100 |
| Additional Paid-in Capital | 800 | 800 |
| Retained Earnings | 5,413,239 | 2,780,009 |
| Total Shareholder's Equity | 5,414,139 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Craters & Freighters's 2025 Franchise Disclosure Document, the total liabilities and shareholder's equity as of December 31, 2023, was $9,391,294. This figure represents the sum of all the company's obligations to creditors (liabilities) and the investment of the owners in the company (shareholder's equity) at that specific point in time. This value is derived from Craters & Freighters's balance sheet, which provides a snapshot of the company's assets, liabilities, and equity. The balance sheet adheres to standard accounting principles, ensuring that assets are always equal to the sum of liabilities and equity. This fundamental accounting equation reflects the financial structure of the company.
For a prospective franchisee, this number offers insight into the overall financial health and stability of Craters & Freighters. A high total liabilities and shareholder's equity generally indicates a larger, more established company with significant assets and financial activity. However, it is crucial to analyze the components of this figure, such as the proportion of liabilities to equity, to assess the company's leverage and risk. A high level of liabilities compared to equity might suggest that the company relies heavily on debt financing, which could pose a risk if the company's earnings decline. Conversely, a high level of equity indicates a strong financial foundation and less reliance on external financing.
It is important to note that the total liabilities and shareholder's equity is just one metric to consider when evaluating a franchise opportunity. A prospective franchisee should also review Craters & Freighters's income statement, cash flow statement, and other financial ratios to gain a comprehensive understanding of the company's financial performance and position. Additionally, it is advisable to consult with a financial advisor to interpret these financial statements and assess the potential risks and rewards of investing in a Craters & Freighters franchise. Understanding the franchisor's financial standing can help a franchisee make an informed decision.