What were the deductions for the allowance for doubtful accounts for Budget 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 deductions for the allowance for doubtful accounts for the year ended December 31, 2022, were $86 million. This figure is part of a larger table presenting the financial status of the allowance for doubtful accounts over three years (2022, 2023, and 2024).
The allowance for doubtful accounts is an estimate of the amount of accounts receivable that a company does not expect to collect. Deductions from this allowance typically represent the actual write-off of uncollectible accounts during the year. For Budget franchisees, understanding these figures can provide insight into the credit risk associated with their customer base and the effectiveness of the company's collection efforts.
Franchisees should monitor these trends over time to assess the financial health of Budget's receivables. A high level of deductions might indicate a need for stricter credit policies or improved collection procedures. Conversely, a lower level of deductions could suggest better credit quality among customers or more effective collection activities. Reviewing these financial statements annually helps franchisees gauge the overall financial stability and risk management practices of the Budget franchise system.