What was the depreciation expense for Kidokinetics in 2021?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
| Leasehold improvements | $ | 61,427 | $ 61,427 | $ | 56,987 | |
|---|---|---|---|---|---|---|
| Less: accumulated depreciation | (24,700) | (13,300 | (1,900) | |||
| $ | 36,727 | $ 48,127 | $ | 55,087 |
Depreciation expense for the years ended December 31, 2023, 2022, and 2021 was $11,400, $11,400, and $1
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the depreciation expense for the years ending December 31, 2023, 2022, and 2021, was $11,400, $11,400, and $1,900, respectively. This means that in 2021, Kidokinetics recorded $1,900 as an expense to account for the decrease in value of its assets due to wear and tear, obsolescence, or other factors.
Depreciation is a common accounting practice that allows businesses to spread the cost of an asset over its useful life. For a prospective Kidokinetics franchisee, understanding depreciation expense can be helpful in assessing the company's financial performance and the value of its assets. It's important to note that depreciation is a non-cash expense, meaning it does not involve an actual outflow of cash, but it does impact the company's net income.
The relatively low depreciation expense in 2021 compared to 2022 and 2023 could indicate that Kidokinetics had fewer depreciable assets in that year or that those assets had a longer useful life. Franchisees should consider this information in the context of the company's overall financial health and consult with a financial advisor to fully understand the implications.