What was the deferred revenue for Gokhale Method in 2020?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
|
| 2021 | 2020 | ||
|---|---|---|---|
| Cash flows from operating activities: | 700 | ||
| Net income | 8 | 14,754 3 | 26.730 |
| Adjustments to reconcile net income to net | |||
| cash provided by operating activities: | |||
| Changes in operating assets and liabilities | |||
| Accounts receivable | (1,597) | 19,896 | |
| Prepaid and other current assets | 428 | (429) | |
| Accounts payable | 1,921 | (7,925) | |
| Payable to teachers | 1,365 | ||
| Other current liabilities | 4 | (662) | |
| Deferred revenue | 1 | (8,423) | (16,752) |
| Net cash provided from operating activities | P 1 | 8,448 | 20,858 |
| Net increase in cash | 8,448 | 20,858 | |
| Cash and cash equivalents - beginning of year | 100 | 112,072 | 91,214 |
| Cash and cash equivalents - end of year | S | 120,520 $ | 112,072 |
| Supplemental disclosures of cash flow infor |
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, the deferred revenue in 2020 was a negative value of $16,752. Deferred revenue primarily comes from initial franchise fees and renewal fees, which are recognized over the franchise term. This means that Gokhale Method received payments for future services or products related to franchise openings or renewals, but had not yet earned the revenue as of that date.
The deferred revenue balance can fluctuate depending on the timing of franchise sales and the recognition of revenue over the term of the franchise agreement. A decrease in deferred revenue, as seen from 2020 to 2021, could indicate that Gokhale Method recognized more revenue from existing deferred balances than it added through new franchise sales during that period.
For a prospective franchisee, understanding deferred revenue is important because it reflects the financial health and stability of Gokhale Method. It provides insight into how the company manages its revenue recognition and its obligations to franchisees. Reviewing these figures over several years can reveal trends in Gokhale Method's growth and revenue management strategies.