According to the Benihana FDD, what is the definition of 'cash and cash equivalents'?

According to Benihana's 2024 Franchise Disclosure Document, cash and cash equivalents are defined as cash on hand and highly liquid instruments with original maturities of three months or less when purchased. For Benihana, these include cash in banks and at the restaurants. This definition is used to categorize assets on the company's balance sheets. The FDD references cash and cash equivalents as of December 31, 2023 and 2022.

For a prospective franchisee, understanding this definition is important because it provides insight into how Benihana manages and reports its liquid assets. Cash and cash equivalents are readily available to meet short-term obligations, and the inclusion of highly liquid instruments reflects a conservative approach to financial management. This definition helps in analyzing the company's financial statements and assessing its liquidity position.

This definition is fairly standard in financial accounting. The inclusion of items with maturities of three months or less is a common benchmark for determining which investments are liquid enough to be considered equivalent to cash. Franchisees can use this information to better understand Benihana's financial health and stability, which is a critical factor when investing in a franchise.