What was the expense (benefit) for the allowance for doubtful accounts for Budget 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 expense (benefit) for the allowance for doubtful accounts for the year ended December 31, 2024, was $(3) million. This means that Budget recognized a benefit of $3 million related to its allowance for doubtful accounts during this period.
The allowance for doubtful accounts is an estimate of the amount of accounts receivable that Budget does not expect to collect. This is a contra-asset account that reduces the gross amount of accounts receivable to the amount that is expected to be collected. The expense (benefit) represents the change in this estimate from one period to the next. A benefit, as in this case, suggests that Budget reduced its estimate of uncollectible accounts, possibly due to improved collections or a change in economic conditions.
For a prospective Budget franchisee, understanding these financial statement details is crucial. While franchisees are not directly involved in managing Budget's overall corporate accounts, these figures reflect the financial health and accounting practices of the parent company. Changes in these allowances can indicate shifts in Budget's financial strategy or the economic environment in which it operates. Franchisees should consider these trends as part of their broader assessment of the franchise's stability and potential.