What was the change in accounts payable and other current liabilities for Gokhale Method in 2023?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
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| 2023 | ||
|---|---|---|
| Cash flows from operating activities: | ||
| Net income | $ | 3,735 |
| Adjustments to reconcile net income to net | ||
| cash provided by operating activities: | ||
| Changes in operating assets and liabilities | ||
| Accounts receivable | (11,987) | |
| Accounts payable and other current liabilities | 1,825 | |
| Deferred revenue | 40,870 | |
| Net cash provided by operating activities | 34,443 | |
| Net increase in cash | 34,443 | |
| Cash and cash equivalents - beginning of year | 120,141 | |
| Cash and cash equivalents - end of year | $ | 154,584 |
| Supplemental disclosures of cash flow information: | ||
| Taxes paid | $ | 800 |
| Interest paid | $ | - |
| int |
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, the change in accounts payable and other current liabilities in 2023 was an increase of $1,825. This figure is part of the cash flow statement, which reconciles net income to net cash provided by operating activities.
Accounts payable and other current liabilities represent short-term obligations that Gokhale Method owes to its suppliers, vendors, and other creditors. An increase in this category suggests that Gokhale Method has deferred payments or has increased its short-term borrowing to manage its cash flow. This can be a strategic decision to optimize working capital, but it's important to monitor these liabilities to ensure they don't become unmanageable.
For a prospective franchisee, understanding these changes in liabilities can provide insights into the financial management practices of Gokhale Method. While a single year's increase may not be alarming, it's crucial to examine trends over multiple years to assess the company's financial stability and its ability to meet its short-term obligations. It would be prudent to discuss these figures with the franchisor to understand the underlying reasons for the change and to evaluate the potential impact on the franchisee's operations.