What was the change in accounts receivable, net, for Gold Star in 2023?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
| Years Ended December 31, | |||
|---|---|---|---|
| 2024 2023 | (Restated) | ||
| Cash Flows From Operating Activities | |||
| Net Income | $ 2,498,270 $ 1,595,317 | $ 1,936,301 | |
| Reconciliation of Net Income with | |||
| Cash Flows From Operations | |||
| Depreciation | 1,249,072 930,216 | 807,295 | |
| Amortization | 63,323 | 70,168 69,297 | |
| Amortization on Loan Cost | 1 3,492 4 1,695 | 1 2,973 | |
| Loss on Disposal of Property and Equipment | - 4 4,694 | 5,367 | |
| Gain on Early Termination of Lease | - (26,298) | - | |
| Changes In | |||
| Accounts Receivable, Net | 206,833 292,502 | 524,429 |
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the change in accounts receivable, net, from 2023 to 2024 was $292,502 to $206,833. This represents a decrease of $85,669 in accounts receivable, net. Accounts receivable represents money owed to Gold Star by its customers for goods or services already provided. A decrease in this figure could suggest more efficient collection practices, a reduction in credit sales, or potentially lower sales volume overall.
For a prospective Gold Star franchisee, understanding the dynamics of accounts receivable is crucial. Efficient management of receivables ensures a steady cash flow, which is vital for covering operational expenses and maintaining profitability. Franchisees should inquire about Gold Star's credit policies, collection procedures, and any support provided in managing accounts receivable.
It's also worth noting that a significant portion of Gold Star's revenue and accounts receivable is concentrated with a few key customers. According to Note 23, two customers accounted for approximately 30% of revenue in 2023 and 77% of accounts receivable at the end of that year. This concentration poses a risk, as the loss of one or both of these major customers could significantly impact Gold Star's financial performance. Franchisees should assess the stability of these customer relationships and understand how Gold Star mitigates this concentration risk.
Overall, while the decrease in accounts receivable might indicate improved efficiency, franchisees should investigate the underlying reasons and consider the broader context of customer concentration to make informed investment decisions.