What was the net loss for Gokhale Method in 2022?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
| 2022 | ||
|---|---|---|
| Cash flows from operating activities: | ||
| Net loss | $ | (1,135) |
| Adjustments to reconcile net loss to net | ||
| cash provided by operating activities: | ||
| Changes in operating assets and liabilities | ||
| Accounts receivable | 983 | |
| Accounts payable and other current liabilities | (3,488) | |
| Deferred revenue | 18 | 3,261 |
| Net cash used in operating activities | - | (379) |
| Net decrease in cash | (379) | |
| Cash and cash equivalents - beginning of year | F | 120,520 |
| Cash and cash equivalents - end of year | $ | 120,141 |
| Supplemental disclosures of cash flow information: | ||
| Taxes paid | $ | 800 |
| Interest paid | $ | 3 |
NOTE 1 – NATURE OF OPERATIONS
Gokhale Method Institute, Inc. ("GMI") was incorporated in 2011 as a California Sub-Chapter S Corporation by Gokhale Method Enterprise, Inc. ("GME"). The subsidiary was formed to franchise the Gokhale Method of dealing with back issues. GMI operates as a business and grants franchises for businesses offering classes and products that help restore the body's primal architecture and movement patterns under the "Gokhale Method" trademarks and related marks. GMI grants franchise licenses in a number of states and countries to practitioners who conduct classes in their franchise area in accordance with the Gokhale Method.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, the company experienced a net loss of $1,135 in 2022. This figure is derived from the cash flow statement, which reconciles the net loss with cash provided by operating activities. It's important to note that this loss is after adjustments for items like changes in accounts receivable ($983), accounts payable and other current liabilities (-$3,488), and deferred revenue ($3,261). These adjustments reflect the non-cash components of the company's operations and their impact on cash flow.
Additionally, the document provides a breakdown of Gokhale Method's revenue and expenses for 2022. The company generated $34,017 in royalties, $5,766 in franchise fees, and $17,642 from continuing education, resulting in a gross profit of $57,425. However, operating expenses, including $2,451 in selling expenses and $55,309 in general and administrative expenses, totaled $57,760. This resulted in a loss from operations of $335. After accounting for income taxes of $800, the net loss amounted to $1,135.
For a prospective franchisee, understanding these financial details is crucial. While the net loss is relatively small, it indicates that the company's expenses slightly exceeded its revenue during the year. Franchisees should consider these figures in the context of the company's overall financial health and future prospects. It's also worth noting that Gokhale Method files a consolidated tax return with Gokhale Method Enterprise, Inc., which could have implications for the company's tax liabilities and financial reporting.