What does Bombs Away consider as cash equivalents in its financial statements?

According to Bombs Away's 2024 Franchise Disclosure Document, cash equivalents are defined within the financial statements. Bombs Away includes all cash balances and highly liquid investments with maturities of three months or less when purchased as cash equivalents.

For a prospective franchisee, understanding this definition is important because it impacts how Bombs Away reports its financial health. Cash and cash equivalents are considered current assets. The balance sheet as of December 31, 2022, lists cash and cash equivalents as $50,000, which is also the total current assets and total assets.

This definition is fairly standard in financial accounting. It means that Bombs Away considers items that can be quickly converted to cash (within three months) as equivalent to cash on hand. This is a common practice that provides a clear picture of the company's immediately available funds.