What was the change in allowance for doubtful accounts for Pump It Up in 2024?
Pump_It_Up Franchise · 2025 FDDAnswer from 2025 FDD Document
quisition of Property and Equipment | | - | (68,087) | | CASH FLOWS FROM FINANCING ACTIVITIES | | | | | Payments on Due to Member | (3,000,000) | (612,681) | | | INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (630,433) | 546,336 | | | Cash and Cash Equivalents - Beginning of Year | 1,111,490 | 565,154 | | | CASH AND CASH EQUIVALENTS - END OF YEAR | $481,057 $ | 1,111,490 | |
FB HOLDINGS, LLC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2024 AND 2023
| 2024 | 2023 | |
|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Net Income | $ 1,690,253 | $ 1,721,880 |
| Adjustments to Reconcile Net Income to Net Cash | ||
| Provided by Operating Activities: | ||
| Depreciation and Amortization | 318,055 | 317,915 |
| Change in Allowance for Doubtful Accounts | (145,660) | (8,414) |
| Noncash Lease Expense | (10,268) | 15,729 |
| Increase (Decrease) in Assets: | ||
| Accounts Receivable | 249,755 | 244,252 |
| Prepaid Expenses | (123) | (29) |
| Increase (Decrease) in Liabilities: | ||
| Accounts Payable | (1,670) | (898) |
| Accrued Expenses | (245,516) | 90,632 |
| Deferred Franchise Fees | 33,500 | (11,500) |
| Net Cash Provided by Operating Activities | 1,888,326 | 2,369,567 |
| CASH FLOWS FROM INVEST |
Source: Item 23 — RECEIPTS (FDD pages 60–225)
What This Means (2025 FDD)
According to Pump It Up's 2025 Franchise Disclosure Document, the change in allowance for doubtful accounts in 2024 was a decrease of $145,660, compared to a decrease of $8,414 in 2023. This figure is part of the adjustments made to reconcile net income to net cash provided by operating activities.
The allowance for doubtful accounts is an estimate of the amount of accounts receivable that Pump It Up believes it may not be able to collect. This is a standard accounting practice where companies recognize that some customers may not pay their invoices. The change in this allowance from year to year reflects changes in the company's assessment of the collectability of its outstanding receivables.
A significant increase in the allowance for doubtful accounts, as seen in 2024, could indicate that Pump It Up anticipates more difficulty in collecting payments from its franchisees or other debtors. This could be due to various factors, such as economic conditions affecting franchisees' ability to pay, or changes in Pump It Up's credit policies. Prospective franchisees should consider these figures as part of their due diligence, as they can provide insights into the financial health and stability of both Pump It Up and its franchisees.