For Aplus, what is included in the definition of cash and cash equivalents?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
Cash and cash equivalents include cash on hand, demand deposits and short-term investments with original maturities of three months or less.
Sunoco LLC and Sunoco Retail have treasury services agreements with Energy Transfer (R&M), LLC, an indirect wholly owned subsidiary of Energy Transfer, for certain cash management activities. The net balance of Sunoco LLC and Sunoco Retail activity is reflected in either "Advances to affiliates" or "Advances from affiliates" on the consolidated balance sheets.
Source: Item 22 — CONTRACTS (FDD page 68)
What This Means (2024 FDD)
According to the 2024 Aplus Franchise Disclosure Document, cash and cash equivalents are defined as cash on hand, demand deposits, and short-term investments that have original maturities of three months or less. This is a standard accounting practice, as it reflects the most liquid assets a company has readily available.
For a prospective Aplus franchisee, understanding this definition is important for interpreting the company's financial statements. Cash and cash equivalents are crucial for day-to-day operations and meeting short-term obligations. A healthy balance of these assets indicates the company's ability to manage its immediate financial needs.
Furthermore, the FDD mentions that Sunoco LLC and Sunoco Retail have treasury services agreements with Energy Transfer (R&M), LLC for cash management activities. The net balance of these activities is reflected as "Advances to affiliates" or "Advances from affiliates" on the consolidated balance sheets. This related-party transaction is something a franchisee should be aware of, as it could impact the cash flow and financial reporting of Aplus.