What were the credit losses for Floors To Go in 2022?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
| Year Ended December 31 | |||
|---|---|---|---|
| 2023 | 2022 | ||
| Revenue | |||
| Operating | $ 3,313,578 | $ 3,301,062 | |
| Sale | 13,451 | 5,000 | |
| of | |||
| franchise | |||
| licenses | |||
| Total | 3,327,029 | 3,306,062 | |
| revenue | |||
| Operating | |||
| expenses | |||
| Management | 800,000 | 800,000 | |
| fees ‐ related | |||
| party | |||
| Franchise | 474,154 | 418,488 | |
| related | |||
| costs | |||
| Commissions | 207,300 | 189,800 | |
| Travel, | 49,481 | 48,161 | |
| meals | |||
| and | |||
| entertainment | |||
| Professional | 44,403 | 55,813 | |
| services | |||
| Credit | 35,724 | 3,504 | |
| losses | |||
| General | 6,328 | 5,899 | |
| office | |||
| Total | 1,617,390 | 1,521,665 | |
| operating | |||
| expenses | |||
| Net | 1,709,639 | 1,784,397 | |
| income | |||
| Member's | 1,259,440 | 1,296,759 | |
| equity, | |||
| beginning | |||
| of | |||
| year | |||
| Member | (2,419,213) | (1,821,716) | |
| distributions | |||
| Member's | $ 549,866 | $ 1,259,440 | |
| equity, | |||
| end | |||
| of | |||
| year |
Statements of Cash Flows
Year Ended December 31 2023 2022 Cash flows from operating activities Net $ 1,709,639 $ 1,784,397 income Adjustments to reconcile net income to net cash provided by operating activities Credit 35,724 3,504 losses Changes in operating assets and liabilities which provided (used
Source: Item 23 — RECEIPTS (FDD pages 47–204)
What This Means (2025 FDD)
According to the 2025 Floors To Go Franchise Disclosure Document, the company experienced credit losses of $3,504 in 2022. This figure represents the amount of accounts receivable that Floors To Go determined to be uncollectible during that year. Credit losses are an adjustment to reconcile net income to net cash provided by operating activities.
For a prospective franchisee, understanding credit losses is important because it reflects the risk associated with extending credit to customers. While $3,504 may seem like a small amount, it's essential to consider this figure in relation to the overall revenue and accounts receivable of Floors To Go. Monitoring credit losses over time can provide insights into the effectiveness of the company's credit policies and collection efforts.
Floors To Go estimates an allowance for expected credit losses based on the amount it expects to collect from customers, considering factors such as the length of time receivables have been outstanding, historical collection experience, current market conditions, and forecasted economic conditions. Amounts deemed uncollectible are written off against this allowance. The expense associated with the allowance for credit losses is recognized in operating expenses, impacting the company's profitability.