What was Budget's depreciation expense for the year ended December 31, 2023?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
ated charges, which reduced the carrying value of our rental vehicles and vehicles held for sale to fair value. See Note 2 – Summary of Significant Accounting Policies.
See Note 17 – Related Party Transactions.
As of December 31,
The components of vehicle depreciation and lease charges, net are summarized below:
| The components of vertice depresentation and | ||||||
|---|---|---|---|---|---|---|
| 2024 | Year End | ed Decembe |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the depreciation expense for the year ended December 31, 2023, was $2,228. This figure represents the expense recognized by Budget for the decrease in value of its assets due to wear and tear, obsolescence, or other factors during that year. Depreciation is a non-cash expense that reflects the allocation of an asset's cost over its useful life.
For a prospective Budget franchisee, understanding the depreciation expense is crucial as it impacts the company's profitability and financial health. While franchisees do not directly incur this expense on Budget's corporate assets, it provides insight into how Budget manages its assets and finances. A higher depreciation expense might indicate significant investments in new assets or a shorter useful life for existing assets, which could have implications for future capital expenditures.
In addition to depreciation expense, the provided financial statement also includes figures for lease charges and (gain) toss on sale of vehicles, net. For the year ended December 31, 2023, lease charges were $167, and the (gain) toss on sale of vehicles, net, was $(656). These figures, along with depreciation expense, contribute to the overall vehicle depreciation and lease charges, net, which was $1,739 for the same period. These values are important for understanding the total cost associated with Budget's vehicle fleet.
It is important to note that these figures are components of vertice depresentation and are presented in the financial statements to provide a comprehensive view of Budget's financial performance. Prospective franchisees should review these figures in conjunction with other financial data to assess the overall financial stability and performance of Budget.