What was the total value of Craters & Freighters' prepaid expenses as of December 31, 2023?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
i LLP
Denver, Colorado April 10, 2024
Balance Sheets
| As of December 31, | 2023 | 2022 |
|---|---|---|
| Current Assets: | ||
| Cash and Cash Equivalents | $ 6,991,649 $ | 2,376,316 |
| Marketable Securities - At Fair Market Value | 634,869 | 528,625 |
| Accounts Receivable - Net of Allowance for | ||
| Credit Losses of $50,000 and $40,000, Respectively | 569,660 | 717,990 |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to Craters & Freighters's 2025 Franchise Disclosure Document, the company's prepaid expenses totaled $201,226 as of December 31, 2023. Prepaid expenses are payments made in advance for goods or services that will be received in the future. These are considered assets on the balance sheet because they represent future economic benefits for Craters & Freighters.
For a prospective Craters & Freighters franchisee, understanding the level of prepaid expenses can offer insights into the company's operational practices. High prepaid expenses might indicate that Craters & Freighters is taking advantage of early payment discounts from vendors or is required to pay in advance for certain services. Conversely, lower prepaid expenses could suggest a more conservative approach to advance payments.
It is also worth noting that the prepaid expenses for 2023 are significantly higher than the previous year. As of December 31, 2022, Craters & Freighters' prepaid expenses were $34,611. The increase from $34,611 in 2022 to $201,226 in 2023 represents a substantial change in how Craters & Freighters manages its expenses. A potential franchisee might want to inquire about the reasons for this increase to better understand the company's financial management and any potential impacts on their own franchise operations.
Reviewing these figures in the context of Craters & Freighters' overall financial health, as detailed in the balance sheets and related financial statements, will provide a more comprehensive understanding. Additionally, comparing these prepaid expenses to industry benchmarks can help a franchisee assess whether Craters & Freighters' financial practices are in line with similar businesses.