What was the change in accounts receivable, net, for Sonesta Select Sonesta Essential in 2024?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
31, 2024 | 25,464,899 | $ 255 | $ 87,652 | $ (9,676) | $ 78,231 | |
RED LION HOTELS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
| (uoriai 5 ili tilousanus | December 31, | |||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | (Restated) | 2022 | |||
| Cash flows from operating activities: | ||||||
| Net income (loss) | $ | (2,913) | $ | 1,477 | $ | (3,186) |
| Adjustments to reconcile net loss to cash provided by (used in) operating activities: | ||||||
| Depreciation and amortization | 489 | 1,691 | 3,506 | |||
| Amortization of key money and contract costs | 1,514 | 396 | 7 | |||
| Amortization of contract liabilities | 192 | 1,497 | 713 | |||
| Deferred income taxes | - | 1 | 1 | |||
| Provision (Recovery) of doubtful accounts | 1,112 | (1,819) | 654 | |||
| Other income (expense), net | - | - | 846 | |||
| Loss (gain |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 84)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the accounts receivable, net, decreased by $3,111 in 2024. This is based on the consolidated statements of cash flows, which tracks changes in current assets and liabilities. The accounts receivable balance went from a deduction of $942 in 2023 to a deduction of $3,111 in 2024.
This change in accounts receivable reflects the difference between the beginning and ending balances of what is owed to Sonesta Select Sonesta Essential by its customers or franchisees. A decrease in accounts receivable, net, typically suggests that Sonesta Select Sonesta Essential has collected more cash from its receivables than it has added in new credit sales during the year. This could be due to more efficient collection efforts, changes in payment terms, or a decrease in sales on credit.
For a prospective franchisee, this information is useful for understanding the cash flow dynamics of Sonesta Select Sonesta Essential. While a decrease in accounts receivable can be a positive sign of efficient cash collection, it's important to consider the broader context. A significant decrease in accounts receivable coupled with a decrease in sales could indicate underlying issues with the business. Therefore, it's essential to analyze these figures in conjunction with other financial metrics to gain a comprehensive understanding of the company's financial health.
It is also important to note that these figures are from the consolidated financial statements, and may not reflect the performance of an individual franchise location. A prospective franchisee should inquire about the typical accounts receivable cycle and collection practices for individual franchise units to better understand the working capital requirements and cash flow patterns they can expect.