What were the deductions for the allowance for doubtful accounts for Budget in 2024, expressed in millions of dollars?
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 deductions for the allowance for doubtful accounts for the year ended December 31, 2024, were $75 million. This figure represents the amount that Budget wrote off from its accounts receivable as uncollectible during that year.
The allowance for doubtful accounts is a contra-asset account used to estimate the amount of accounts receivable that a company does not expect to collect. Deductions from this allowance typically occur when specific customer accounts are deemed uncollectible and are written off. The $75 million deduction suggests that Budget had a significant amount of bad debt that it recognized during 2024.
For a prospective Budget franchisee, this information is relevant because it provides insight into the company's financial health and its experience with uncollectible accounts. While franchisees are not directly responsible for Budget's overall corporate accounting, understanding these financial metrics can help them assess the stability and risk associated with the franchise. Franchisees may want to inquire about Budget's credit policies and procedures for managing accounts receivable to minimize their own exposure to bad debt.