What was the balance of the Allowance for Doubtful Accounts at the end of the period for Budget as of December 31, 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 for the year ended December 31, 2022, was $86 million. This figure represents Budget's estimate 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 provides a more accurate picture of the company's financial health. The table also shows the beginning balance, expense (benefit), other adjustments, and deductions related to the allowance for doubtful accounts.
For a prospective Budget franchisee, understanding the allowance for doubtful accounts is important because it reflects the credit risk associated with the company's receivables. A higher allowance balance may indicate a higher risk of uncollectible accounts, which could impact the franchisee's revenue and profitability. Reviewing these figures over several years, as presented in the table, can provide insights into the consistency and reliability of Budget's credit management practices.