What was the total amount of Spray Net's prepaid expenses at the end of 2023?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
g revenues | 210,000 | 60,000 | 320,000 | | Royalties | 446,767 | 489,788 | 260,661 | | Local and digital marketing revenues | 1,490,118 | 1,144,512 | 551,057 | | Other | 200,603 | 267,841 | 138,115 | | Total Revenues | 2,863,931 | 2,596,651 | 1,567,875 | | Operating Expenses | 3,701,092 | 1,663,428 | 2,296,886 | | Net Income (Loss) Before Taxes | (837,161) | 933,223 | (729,011) | | Income Tax Benefit (Expense) | 36,616 | (93,518) | 38,725 | | Net Income (Loss) | (800,545) | 839,705 | (690,286) | | Stockholder's equity (Deficit) - Beginning | 22,784 | (816,921) | (167,748) | | Prior Period Adjustment | | | 41,113 | | Stockholders' equity (Deficit) - Ending | $ (777,761) | $ 22,784 | $ (816,921) |
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Cash Flows from Operating Activities: | |||
| Net income (loss) | $ (800,545) | $ 839,705 | $ (729,011) |
| Amortization expense | _ | 7,411 | $ 7,411 |
| Adjustments to reconcile net (loss) to cash | |||
| provided by operating activities: | |||
| Changes in assets and liabilities | |||
| Accounts receivable | 227,980 | 135,177 | (286,853) |
| Prepaid expenses | 10,000 | 92,481 | (30,222) |
| Contract Assets | (74,854) | (311,50 |
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, the company's prepaid expenses as of December 31, 2023, were $92,481. This figure reflects the total value of services or goods that Spray Net had paid for in advance but not yet fully utilized or consumed by that date. Prepaid expenses are considered assets on the company's balance sheet because they represent future economic benefits for Spray Net.
For a prospective Spray Net franchisee, understanding the franchisor's prepaid expenses can offer insights into the company's financial management and operational strategies. Prepaid expenses can include items such as insurance premiums, rent, or marketing expenses paid in advance. Monitoring these expenses can help assess the company's ability to manage its cash flow and allocate resources effectively.
It's important to note that prepaid expenses are eventually recognized as expenses on the income statement as the benefits are realized over time. Therefore, the $92,481 reported for 2023 would have been gradually expensed in subsequent periods as Spray Net utilized the related services or goods. Reviewing trends in prepaid expenses over multiple years, alongside other financial statement line items, can provide a more comprehensive view of Spray Net's financial health and operational efficiency.