What was the retained earnings (accumulated deficit) for Gokhale Method in 2021?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
22
| 2021 | 2020 | |||
|---|---|---|---|---|
| ASSETS | ||||
| CURRENT ASSETS | ||||
| Cash and cash equivalents | S | 120,520 | 5 | 112,072 |
| Accounts receivable, net | 4,941 | 3,344 | ||
| Other current assets | - | - | 428 | |
| TOTAL ASSETS | S | 125,461 | S | 115,844 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
| CURRENT LIABILITIES | ||||
| Accounts payable | 5 | 8,652 | $ | 6,731 |
| Deferred revenue | 4,825 | 13,248 | ||
| Payable to Teachers | 1,365 | |||
| Other current liabilities | - | 138 | _ | 138 |
| TOTAL LIABILITIES | _ | 14,980 | 1 | 20,117 |
| STOCKHOLDERS' EQUITY | ||||
| Common stock (1,000 voting shares anthorized, 500 shares issued and | 5 | 5 | ||
| outstanding, $0.01 par value) | ||||
| Common stock (1,000 non-voting shares authorized, no shares issued | ||||
| and outstanding, $0.01 par value) | ||||
| Additional Paid in Capital | 74,995 | 74,995 | ||
| Stockholder's contribution | 25,662 | 25,662 | ||
| Retained earnings (accumulated deficit) | _ | 9,819 | (4,935) | |
| Total stockholders' equity | 110,481 | 95,727 | ||
| TOTAL LIABILITIES & STOCKHOLDERS' EQUI |
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, the company's retained earnings (accumulated deficit) as of December 31, 2021, was $9,819. This figure represents the portion of Gokhale Method's net income that has been retained over time, rather than being distributed to owners as dividends. A positive retained earnings balance generally indicates that the company has been profitable and has chosen to reinvest some of its earnings back into the business.
For a prospective Gokhale Method franchisee, retained earnings can be an indicator of the financial stability and maturity of the company. A consistently growing retained earnings balance suggests that the company is managing its finances effectively and has the capacity to fund future growth or weather economic downturns. However, it is important to consider retained earnings in conjunction with other financial metrics, such as revenue, expenses, and debt, to get a comprehensive picture of the company's financial health.
It's also worth noting that the FDD includes financial statements that have been audited by an independent auditor. This audit provides an additional level of assurance regarding the accuracy and reliability of the financial information presented. Franchisees should carefully review these audited statements and consult with a financial advisor to fully understand the financial position of Gokhale Method before making an investment decision.
In comparison to the previous year, 2020, Gokhale Method had an accumulated deficit of ($4,935). The increase to $9,819 in 2021 represents a positive change of $14,754 year over year.