What was the balance of the allowance for doubtful accounts for Budget at the end 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 end of the period in 2024 was $87 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 the risk of non-payment by its customers. The changes in this allowance from year to year reflect adjustments made based on historical collection experience, current economic conditions, and specific customer circumstances.
For a prospective Budget franchisee, understanding the allowance for doubtful accounts can provide insights into the credit risk associated with Budget's customer base. While franchisees may not directly manage this specific account on Budget's corporate balance sheet, it is an indicator of the financial health and risk management practices of the overall organization. A higher allowance might suggest a more cautious approach to revenue recognition or a higher risk of customer defaults, while a lower allowance could indicate more stringent credit policies or a more financially stable customer base.