What does Amorino consider to be cash equivalents?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
Cash and Cash Equivalents: The Company considers unrestricted demand deposits and highly liquid investments purchased with an original maturity of three months or less which can be readily converted to cash on demand, without penalty, to be cash equivalents. At times, bank balances may exceed U.S. federally insured limits.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, the company defines cash equivalents as unrestricted demand deposits and highly liquid investments. These investments must be purchased with an original maturity of three months or less. Additionally, these investments should be readily convertible to cash on demand without incurring any penalties.
This definition is important for prospective franchisees as it clarifies how Amorino manages and accounts for its liquid assets. Understanding this definition can help franchisees interpret Amorino's financial statements and assess the company's financial health.
The disclosure also notes that at times, Amorino's bank balances may exceed U.S. federally insured limits. This indicates that while the company considers these deposits as cash equivalents, franchisees should be aware that amounts exceeding insured limits carry a degree of risk, though the company considers collection of accounts receivable as reasonably certain.