What was the balance of the allowance for doubtful accounts for Budget at the end of the period in 2022?
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 end of the period in 2022 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 risk that some customers may not pay their outstanding invoices. The changes in this allowance from year to year can indicate shifts in Budget's credit policies, the financial health of its customers, or broader economic trends affecting payment patterns.
For a prospective Budget franchisee, understanding the allowance for doubtful accounts provides insight into the financial management and risk assessment practices of the company. While franchisees may not directly manage this specific account at the corporate level, it reflects the overall financial stability and the quality of earnings of Budget, which can impact the long-term success and sustainability of the franchise system.