What was the change in prepaid commissions (net of current portion) for Deer Solution in 2022?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
ions | 100,000 | | Members' distributions | (60,600) | | Net income / (loss) | 76,903 | | Members' Equity At December 31, 2022 | $ 116,303 |
Deer Solution Franchising, LLC Statement Of Cash Flows Year Ended December 31, 2022
| 2022 | |
|---|---|
| Cash Flows From Operating Activities | |
| Net income / (loss) | $ 76,903 |
| Adjustments to reconcile net income to net cash | |
| provided by operating activities | |
| Change in operating activities | |
| Change in prepaid commissions - current portion | (67,857) |
| Change in prepaid commissions - net of current portion | (339,286) |
| Change in deferred revenue - current portion | 50,143 |
| Change in deferred revenue - net of current portion | 250,714 |
| Change in accrued liabilities | 35,000 |
| Net Cash Provided By (Used In) Operating Activities | 5,617 |
| Cash Flows From Investing Activities | |
| Members' contributions | 100,000 |
| Members' distributions | (60,600) |
| Net Cash Flows Provided By (Used In) Investing Activities | 39,400 |
| Cash Flows From Financing Activities | |
| Net Cash Flows Provided By (Used In) Financing Activities | - |
| Net Change In Cash And Cash Equivalent During The Year | 45,017 |
| Cash and cash equivalent - beginning of the year | = |
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, the change in prepaid commissions (net of current portion) in 2022 was a decrease of $339,286. This figure reflects the net change in these commissions after accounting for the current portion, which represents the amount expected to be recognized within the next year.
For a prospective Deer Solution franchisee, this decrease could indicate a strategic shift in how commissions are handled or a change in the timing of commission payments. It's important to understand what these prepaid commissions represent. Typically, prepaid commissions are expenses the company has paid in advance but not yet fully recognized as expenses on the income statement.
This information is found within the Statement of Cash Flows, which provides insights into how Deer Solution manages its cash. Reviewing this change in conjunction with other financial statement line items, such as deferred revenue and accrued liabilities, can provide a more comprehensive understanding of the company's financial health and operational strategies. A potential franchisee should inquire about the nature of these prepaid commissions and the reasons behind the significant change during 2022 to assess any potential impact on their own franchise operations.