What was the amount of Budget's retained earnings (accumulated deficit) as of January 1, 2022?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
644 | 642 | 16 626 $ 642 | | Cash and cash equivalents, program and restricted cash, end of period | $ | 597 | $ 644 | $ 642 | | Supplemental disclosure Interest payments Income tax payments, net | $ $ | 1,273 50 | | |
Avis Budget Group, Inc. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In millions)
| Commo | n Stock | Additional Pald-in | Retained Earnings | Accumulated Other | Treasur | y Sto | Stockholders' Equity Attributable to Avis Budget | Non-controlling Interests | Total Stoci | cholders' Equity |
|---|
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the balance of retained earnings (accumulated deficit) at January 1, 2022 was ($185) million. This figure represents the cumulative profits Budget has retained in its business over all previous years, minus any deficits. A negative number indicates an accumulated deficit, meaning the company's losses have exceeded its earnings over time.
For a prospective Budget franchisee, this historical deficit may signal financial challenges or past losses within the company. While not necessarily indicative of current financial instability, it is a point to consider when evaluating the overall health and trajectory of the franchise. It's important to note that retained earnings can fluctuate due to various factors, including net income, dividends paid, and stock repurchases.
It would be prudent for a potential franchisee to investigate the reasons behind the accumulated deficit and understand how Budget has addressed these financial challenges. Reviewing subsequent financial statements and asking detailed questions about the company's financial strategies can provide a clearer picture of its current financial standing and future prospects.