What was the amount of depreciation and amortization for Precision Door Service in 2022?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
0 335,404 (4,769) | $ 2,944,568 168,428 (22,873) | | Total Member's Equity | 3,111,215 | 3,090,123 | | Total liabilities and member's equity | $ 3,198,931 | $ 3,161,602 |
Combined Statements of Operations and Comprehensive Income ($000's)
| For the years ended December 31, | 2023 | (Restated) 2022 |
|---|---|---|
| Revenues and income | ||
| Franchise service fees | $ 169,842 | 152,248 |
| Synthetic royalties and master license fees | 28,705 | 22,879 |
| Franchise sales fees | 36,783 | 13,642 |
| Sales of products and services | 143,807 | 123,984 |
| Advertising and promotional fund revenue | 42,404 | 39,184 |
| Other | 30,338 | 32,014 |
| revenue | ||
| Total revenues and income | 451,879 | 383,951 |
| Cost of Sales | ||
| Products and services | 68,752 | 62,493 |
| Gross Profit | 383,127 | 321,458 |
| Selling expense | 6,939 | 8,274 |
| General and administrative expense | 18,705 | 9,033 |
| Advertising and promotional fund expense | 47,365 | 42,987 |
| Depreciation and amortization | 97,290 | 82,921 |
| Management expenses |
Source: Item 21 — Financial Statements (FDD page 91)
What This Means (2025 FDD)
According to Precision Door Service's 2025 Franchise Disclosure Document, the depreciation and amortization expenses for the years ended December 31, 2022, was $82,921. This figure represents the accounting method of allocating the cost of tangible assets (depreciation) and intangible assets (amortization) over their useful lives, rather than expensing the full cost in the year of purchase. This non-cash expense reflects the reduction in value of Precision Door Service's assets due to wear and tear, obsolescence, or usage.
For a prospective Precision Door Service franchisee, understanding depreciation and amortization is crucial for assessing the true profitability and cash flow of the business. While it doesn't represent an immediate cash outlay, it does impact the net income reported on the income statement. Higher depreciation and amortization expenses can reduce taxable income, potentially lowering income tax obligations.
It's important to note that depreciation methods and asset useful lives can vary, impacting the annual expense. Reviewing Precision Door Service's accounting policies, as detailed in the notes to the financial statements, provides insight into how these expenses are calculated. This information, combined with an understanding of the franchisee's own capital expenditure plans, can help in forecasting future depreciation and amortization expenses and their impact on the franchisee's financial performance.