What was the change in accounts and notes receivable, trade for My Salon Suite in 2023?
My_Salon_Suite Franchise · 2025 FDDAnswer from 2025 FDD Document
| | | | | | | | 31, | | | | | | | | 2023 | | | | | | |
Consolidated Statements of Cash Flows
| For the years ended December 31, | 2023 | 2022 |
|---|---|---|
| Operating | ||
| activities | ||
| Net income | $ 12,569,087 | $ 17,655,295 |
| Adjustments | ||
| to | ||
| reconcile | ||
| net | ||
| income | ||
| to | ||
| net | ||
| cash | ||
| provided by operating activities: | ||
| Bad | 429,277 | 58,670 |
| debt | ||
| expense | ||
| Depreciation | 4,502,473 | 4,043,757 |
| & | ||
| amortization | ||
| Share-based | 1,144,951 | 955,911 |
| compensation | ||
| expense | ||
| Gain | - | (253,092) |
| on | ||
| sale | ||
| of | ||
| assets | ||
| Capital | 323,146 | - |
| Asset | ||
| Impairment | ||
| Deferred | 182,406 | (526,188) |
| income | ||
| taxes | ||
| Amortization | 4,322,294 | 3,957,006 |
| of | ||
| right-of-use | ||
| asset | ||
| Changes in operating assets and | ||
| liabilities, | ||
| net | ||
| of | ||
| businesses | ||
| acquired: | ||
| Accounts | (715,354) | (1,222,781) |
| and | ||
| notes | ||
| receivable, | ||
| trade | ||
| Amount | (494,880) | 844,519 |
| due | ||
| to/from | ||
| affiliate | ||
| Prepaid | 635,960 | 61,885 |
| expenses | ||
| Other | (817,899) | 410,263 |
| assets | ||
| Income | 3,038,140 | (841,376) |
| taxes | ||
| payable | ||
| Accounts | (353,661) | (236,487) |
| payable | ||
| Accrued | 4,598,741 | 1,499,001 |
| liabilities | ||
| Other | (538,612) | (2,367,045) |
| long-term | ||
| liabilities | ||
| Deferred | (753,097) | 108,492 |
| revenue | ||
| Operating | (3,407,70) | (3,613,275) |
| lease | ||
| obligation | ||
| Net | 24,665,263 | 20,534,555 |
| cash | ||
| provided | ||
| by | ||
| operating | ||
| activities | ||
| Investing | ||
| activities | ||
| Capital | (2,715,270) | (3,563,623) |
| expenditures | ||
| Proceeds | - | 725,000 |
| from | ||
| sale | ||
| of | ||
| assets | ||
| Acquisition | (6,784,799) | - |
| of | ||
| a | ||
| business, | ||
| net | ||
| of | ||
| cash | ||
| acquired | ||
| Net | (9,500,069) | (2,838,623) |
| cash | ||
| used | ||
| in | ||
| investing | ||
| activities | ||
| Financing | ||
| activities | ||
| Payments on finance lease | (36,863) | (53,811 ) |
| Net | (18,947,698) | (11,618,027) |
| advances | ||
| to | ||
| parent | ||
| Net | (18,984,561) | (11,671,838) |
| cash | ||
| used | ||
| in | ||
| financing | ||
| activities | ||
| Net | (3,819,367) | 6,024,094 |
| increase | ||
| (decrease) | ||
| in | ||
| cash | ||
| and | ||
| cash | ||
| equivalents | ||
| Cash | 11,866,419 | 5,842,325 |
| and | ||
| cash | ||
| equivalents | ||
| at | ||
| beginning | ||
| of year | ||
| Cash | $ 8,047,052 | $ 11,866 |
Source: Item 6 — Other Intangibles and Goodwill (FDD pages 274–314)
What This Means (2025 FDD)
According to My Salon Suite's 2025 Franchise Disclosure Document, the change in accounts and notes receivable, trade, was a decrease of $715,354 in 2023. This figure is part of the adjustments used to reconcile net income to net cash provided by operating activities. In 2022, there was a decrease of $1,222,781.
This decrease in accounts and notes receivable could indicate that My Salon Suite franchisees are either paying their dues more promptly or that there has been a reduction in the overall amount of outstanding receivables. For a prospective franchisee, this could mean a more stable and predictable financial relationship with My Salon Suite, as it suggests efficient collection processes.
However, it's important to consider this change in the context of overall financial performance. While a decrease in receivables might seem positive, it could also be influenced by factors such as changes in sales volume or credit policies. Therefore, a prospective franchisee should investigate the reasons behind this change and assess its potential impact on their own business operations. Understanding the dynamics of accounts and notes receivable can provide valuable insights into the financial health and stability of the My Salon Suite franchise system.