What was the balance of the allowance for doubtful accounts for Budget at the beginning of the period in 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 | |------------------------------------------
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 2024 was $87 million. This figure reflects the company'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 is a way for the company to account for the risk of non-payment by its customers. The balance is based on past experiences, current economic conditions, and an evaluation of the current accounts receivable portfolio.
For a prospective Budget franchisee, understanding the allowance for doubtful accounts can provide insight into the credit risk associated with Budget's customer base. While franchisees may not directly manage this specific account, it reflects the overall financial health and risk management practices of the company. A higher allowance might suggest a more cautious approach to revenue recognition, while a lower allowance could indicate a more optimistic view of collectibility.