What was the reported net loss for Gokhale Method at the end of the year 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 | $ | 8 |
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, the net loss for the company at the end of 2022 was $1,135. This figure is part of the cash flow statement, which outlines the movement of cash both into and out of the company during the specified period. Net loss is a key indicator of a company's financial performance, representing the difference between total revenues and total expenses. In this case, Gokhale Method's expenses exceeded its revenues, resulting in a loss.
For a prospective franchisee, understanding the franchisor's financial health is crucial. A net loss, while not always indicative of long-term instability, warrants further investigation. It is important to consider the context of this loss. Was it a one-time event due to unusual expenses, or is it part of a trend? Is the company investing heavily in growth, which temporarily impacts profitability? These are questions a potential franchisee should explore.
Furthermore, the cash flow statement provides additional insights beyond the net loss. It shows how the loss impacts the company's cash position and how the company manages its cash flow through operating, investing, and financing activities. In the case of Gokhale Method, the net loss of $1,135 was offset by adjustments and changes in operating assets and liabilities, resulting in a net decrease in cash of $379 for the year. This suggests that while the company experienced a loss, it was able to manage its cash flow to some extent.
In summary, while the reported net loss for Gokhale Method in 2022 was $1,135, prospective franchisees should conduct a thorough review of the company's financial statements and ask detailed questions about the factors contributing to the loss and the company's plans for future profitability. This will help them make an informed decision about investing in a Gokhale Method franchise.