What was the amount of Budget's provision for doubtful accounts as of December 31, 2024?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
ed average interest rate of 8.01%. These notes were issued under previously outstanding series of debt.
In February 2025, we borrowed $500 million under a floating rate term loan due December 2025, which is part of our senior revolving credit facilities.
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Schedule II – Valuation and Qualifying Accounts
| (in millions) Description | Balance of | at Beginning Period | Expe | nse (Benefit) | Other Adjustments (a) | _ | Deductions | Balance at End of Period |
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Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the balance for the allowance for doubtful accounts at the end of the period ending December 31, 2024, was $96 million. This figure represents Budget's estimation of the amount of accounts receivable that may not be collected.
The allowance for doubtful accounts is a contra-asset account that reduces the total amount of accounts receivable reported on Budget's balance sheet. It reflects the company's assessment of the risk of non-payment by its customers. The expense (benefit) related to this allowance for the year ended December 31, 2024, was a benefit of $3 million, meaning that Budget reduced its allowance during that year.
For prospective Budget franchisees, understanding these figures is crucial as it provides insight into the financial health and risk management practices of the company. A higher allowance for doubtful accounts could indicate a higher risk of non-payment from customers, which could indirectly affect franchisees if it reflects broader economic conditions or issues within the Budget system. Reviewing these figures over several years, as presented in the table, can reveal trends and provide a more comprehensive understanding of Budget's financial stability.