What was the balance of the Allowance for Doubtful Accounts at the beginning of the period for Budget as of December 31, 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.
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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 for the year ended December 31, 2023, was $86 million. This figure represents 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 gross amount of accounts receivable to the net realizable value. This is a standard accounting practice to provide a more accurate view of a company's assets. The changes in this allowance from year to year can reflect changes in Budget's credit policies, economic conditions, or the financial health of its customers.
For a prospective Budget franchisee, understanding the Allowance for Doubtful Accounts can provide insight into the credit risk associated with Budget's receivables. While franchisees may not directly manage these specific corporate accounts, the overall financial health and risk management practices of Budget are relevant to their investment. Reviewing trends in this allowance over several years, in conjunction with other financial metrics, can offer a more comprehensive understanding of Budget's financial stability.