What was the noncash lease expense for Golden Krust Caribbean Restaurant in 2023?
Golden_Krust_Caribbean_Restaurant Franchise · 2024 FDDAnswer from 2024 FDD Document
nd 2022.
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GOLDEN KRUST FRANCHISING, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2023 AND 2022
| 2023 | 2022 | ||
|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Net Income | $ | 82,149 | $ 1,141,393 |
| Adjustments to Reconcile Net Income to Net Cash | |||
| Used by Operating Activities: | |||
| Depreciation and Amortization Expense | 71,983 | 91,007 | |
| Noncash Lease Expense | 4,432 | 54,540 | |
| Bad Debt Expense | 606,734 | 196,574 | |
| Change in Allowance for Notes Receivable | - | 14,999 | |
| Loss on Disposal of Equipment | 92,339 | 3,400 | |
| (Increase) Decrease in Operating Assets: | |||
| Accounts Receivable | (614,033) | (477,332) | |
| Inventory | 5,837 | 3,715 | |
| Prepaid Expenses | 2,638 | 35,908 | |
| Other |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 35)
What This Means (2024 FDD)
According to Golden Krust Caribbean Restaurant's 2024 Franchise Disclosure Document, the noncash lease expense for 2023 was $4,432. This figure is part of the adjustments used to reconcile net income to net cash used by operating activities. It reflects the non-cash portion of lease expenses recognized during that year.
For a prospective franchisee, understanding noncash lease expenses is crucial because it impacts the overall financial performance of Golden Krust Caribbean Restaurant. While it doesn't represent an actual cash outflow, it affects the reported net income. This can influence decisions related to financial planning, investment, and valuation of the franchise.
Noncash expenses like these are common in financial statements and arise from accounting practices that recognize expenses in periods different from when the cash transaction occurs. Reviewing these figures helps in assessing the true economic performance of Golden Krust Caribbean Restaurant, separating cash movements from accounting adjustments.
Franchisees should pay close attention to these noncash items to get a comprehensive view of the company's financial health. Understanding the nature and impact of noncash lease expenses can aid in making informed business decisions and evaluating the long-term viability of the franchise.