What was the net accounts receivable for Gokhale Method in 2021?
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 |
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, the changes in operating assets and liabilities related to accounts receivable in 2021 was a decrease of $1,597. In 2020, there was an increase of $19,896.
Accounts receivable primarily consists of net royalties receivable from franchisees, teachers, or class fees collected by Gokhale Method Enterprise, Inc. (GME). The company uses the allowance method for doubtful accounts, basing the allowance on management's review of past due accounts.
For a prospective franchisee, this indicates the fluctuations in outstanding payments owed to Gokhale Method. A decrease in accounts receivable could mean that franchisees are paying their dues more promptly, or that there has been a decrease in sales. An increase could mean the opposite: that franchisees are taking longer to pay, or that sales have increased. It is important to note that management believed all receivables were collectible at the end of both 2021 and 2022.