What was the change in accounts receivable for Engineering For Kids in 2023?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
,219 | 37,219 | | BALANCE, December 31, 2024 | $ 100 | $ 112,512 | $ 112,612 |
ENGINEERING FOR KIDS INTERNATIONAL, LLC STATEMENTS CASH FLOWS YEARS ENDED DECEMBER 31, 2024 2023, AND 2022
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| INCREASE (DECREASE) IN CASH AND CASH | |||
| EQUIVALENTS | |||
| Cash flows from operating activities | $ 37,219 | $ 34,933 | $ 56,260 |
| Net income | |||
| Adjustments to reconcile net income to | |||
| net cash provided (used) by operating activities | |||
| Amortization | 10,437 | - | 2,235 |
| Changes in assets and liabilities | |||
| Accounts receivable | (13,138) | 16,709 | (44,865) |
| Prepaid expenses | 3,625 | 111 | 8,879 |
| Accounts payable | (320) | (6,318) | - |
| Due to/from related party | (130,008) | 63,874 | 30,249 |
| Accrued liabilities | (1,927) | 6,244 | (20,060) |
| Total adjustments | (131,331) | 80,620 | (23,562) |
| Net cash provided (used) by operating activities | (94,112) | 115,553 | 32,698 |
| Cash flows from investing activities | |||
| Investment in intangible assets | (1,808) | (28,934) | (22,345) |
| NET INCREASE (DECREASE) IN CASH AND | (95,920) | 86,619 | 10,353 |
| CASH EQUIVALENTS | |||
| CASH AND CASH EQUIVALENTS, b |
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2025 FDD)
According to Engineering For Kids's 2025 Franchise Disclosure Document, the change in accounts receivable in 2023 was $16,709. This figure is part of the statement of cash flows, specifically within the cash flows from operating activities. It represents an increase in accounts receivable during that year.
For a prospective Engineering For Kids franchisee, this indicates that the company experienced an increase in the amount of money owed to it by customers in 2023. This could be due to increased sales on credit or changes in payment terms offered to customers. Monitoring accounts receivable is important for managing cash flow, as it reflects money that is expected to be collected in the future.
It's worth noting that accounts receivable are subject to potential credit losses, as mentioned in Note 1 of the FDD. Engineering For Kids manages this risk by evaluating contract terms, customer creditworthiness, and may require prepayment to mitigate the risk of loss. They also maintain an allowance for credit losses to account for potentially uncollectible amounts. Understanding how Engineering For Kids manages its accounts receivable and potential credit losses is crucial for assessing the financial health and stability of the company.