What was the balance of the allowance for doubtful accounts for Budget at the beginning of the period in 2023, expressed in millions of dollars?
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 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.
For a prospective Budget franchisee, understanding the allowance for doubtful accounts is crucial as it reflects the credit risk associated with the business. A higher allowance might indicate a more conservative approach to revenue recognition, while a lower allowance could suggest a more optimistic view of collectibility. Franchisees should consider this information in conjunction with other financial metrics to assess the overall financial health and stability of Budget.
It's important to note that the allowance for doubtful accounts is an estimate and can be influenced by various factors, including economic conditions, industry trends, and Budget's credit policies. Franchisees should inquire about the historical accuracy of these estimates and the factors that could potentially impact future collectibility. This due diligence will help franchisees make informed decisions about their investment and manage their own financial risks effectively.