What was the balance of the allowance for doubtful accounts for Budget at the beginning of the period in 2023?
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.
****
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 |
|---|
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the balance of the allowance for doubtful accounts at the beginning of the period in 2023 was $86 million. This figure represents Budget's estimation of the amount of accounts receivable that may not be collectible.
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 credit risk and potential losses from customers who may not be able to pay their outstanding invoices. The beginning balance is the amount that was estimated to be uncollectible at the start of the accounting period.
For a prospective Budget franchisee, understanding the allowance for doubtful accounts can provide insights into the financial health and risk management practices of the company. A higher allowance may indicate a more conservative approach to revenue recognition or a higher level of concern about customer creditworthiness. Monitoring these figures over time can help franchisees assess the stability and reliability of Budget's financial performance.