What was the provision (recovery) of doubtful accounts for Sonesta Select Sonesta Essential in 2023?
Sonesta_Select_Sonesta_Essential Franchise · 2025 FDDAnswer from 2025 FDD Document
| (dollars in thousands) | |||||
|---|---|---|---|---|---|
| 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) on sale of hotel | 153 | ( 160) | - | ||
| Change in current assets and liabilities | |||||
| Accounts receivable, net | ( 3,111) | ( 942) | ( 50) | ||
| Prepaid expenses and other current assets | ( 706) | ( 414) | ( 541) | ||
| Other long term assets | ( 19,498) | ( 9,440) | ( 1,007) | ||
| Accounts payable | ( 434) | ( 436) | ( 682) | ||
| Loyalty program liability | 139 | - | - | ||
| Accrued compensation, accrued expenses, and other liabilities | 893 | ( 2,777) | 3,600 | ||
| Net cash provided by (used in) operating activities | ( 22,170) | ( 10,926) | 3,861 | ||
| Cash flows from investing activities: | |||||
| Capital expenditures | ( 735) | ( 433) | ( 358) | ||
| Proceeds from sale of hotel | - | 550 | - | ||
| Merger purchase price adjustment | - | - | ( 264) | ||
| Disbursement of notes receivable | ( 12) | - | - | ||
| Collection of notes receivable | 14 | 39 | 54 | ||
| Cash transfers from (to) parent for centralized cash management | - | 38,264 | (3,245) | ||
| Net cash provided by (used in) investing activities | ( 733) | 38,420 | (3,813) | ||
| Cash flows from financing activities: | |||||
| Cash transfers from (to) parent for centralized cash management | ( 1,534) | 8,768 | - | ||
| Net cash provided by (used in) financing activities | ( 1,534) | 8,768 | - | ||
| Change in cash and cash equivalents: | |||||
| Net increase (decrease) in cash and cash equivalents | (24,437) | 36,262 | 48 | ||
| Cash and cash equivalents at beginning of period | 37,753 | 1,491 | 1,443 | ||
| Cash and cash equivalents at end of period | $ 13,316 | $ 37,753 | $ 1,491 |
Source: Item 23 — RECEIPTS (FDD pages 84–261)
What This Means (2025 FDD)
According to Sonesta Select Sonesta Essential's 2025 Franchise Disclosure Document, the provision (recovery) of doubtful accounts in 2023 was a negative value, specifically $(1,819) thousand. This figure is part of the cash flow from operating activities.
In simpler terms, this means that Sonesta Select Sonesta Essential recovered $1,819,000 in previously doubtful accounts during 2023. This recovery positively impacted the cash flow from operating activities for that year.
A 'doubtful account' typically refers to an account receivable that a business deems unlikely to be collected. When a company recovers an amount from an account previously considered doubtful, it reverses the earlier provision, leading to a negative value in the provision for doubtful accounts. This can be seen as a positive financial event, as it improves the company's cash flow and reduces potential losses.