According to Budget's financial statements, what is considered a cash equivalent?

According to Budget's 2025 Franchise Disclosure Document, the company considers highly liquid investments with an original maturity of three months or less to be cash equivalents. Additionally, program cash, which is specifically designated for purchasing assets under vehicle programs or repaying related debt, is considered a restricted cash equivalent. This definition is important for understanding Budget's financial statements, as it clarifies how the company classifies its most liquid assets.

For a prospective Budget franchisee, understanding this definition is crucial for interpreting the financial health of the company. Cash equivalents are readily convertible to cash and are a key indicator of short-term liquidity. Knowing that Budget includes investments with maturities of three months or less in this category provides a clearer picture of the company's ability to meet its immediate obligations.

The distinction between general cash equivalents and program cash is also significant. Program cash is restricted, meaning it can only be used for specific purposes related to vehicle programs. This restriction could impact the overall financial flexibility of Budget, as this cash is not available for general corporate purposes. Franchisees should be aware of these restrictions when assessing the company's financial statements and considering their investment.