What was the depreciation expense for Gold Star in 2023 (restated)?
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 |
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the restated depreciation expense for the year ending December 31, 2023, was $807,295. This figure is part of the reconciliation of net income with cash flows from operations. Depreciation is a non-cash expense that reflects the reduction in value of Gold Star's assets over time.
For a prospective franchisee, understanding depreciation is crucial because it impacts the company's overall financial health and profitability. While depreciation itself doesn't involve a direct cash outflow, it reduces the reported net income, which can affect various financial ratios and metrics used to evaluate the company's performance. A restatement, as mentioned in the document, indicates that previous financial statements were corrected, in this case, to adjust for 401(k) expenses. This highlights the importance of reviewing the restated figures to get an accurate picture of the company's financial performance.
It's important for potential franchisees to note that depreciation can vary depending on the company's asset base and accounting methods. Reviewing these figures in the context of Gold Star's overall financial statements can provide a more comprehensive understanding of the company's financial management and investment in its assets. Franchisees should also inquire about the company's policies on capital expenditures and asset management to better understand future depreciation trends.