How does Carbones Pizzeria define cash equivalents?

According to Carbones Pizzeria's 2025 Franchise Disclosure Document, the company considers certain financial instruments as cash equivalents for accounting purposes. Specifically, Carbones Pizzeria defines cash equivalents as all highly liquid debt instruments purchased with original maturities of three months or less. This definition is used in the preparation of the company's consolidated financial statements.

This definition is important for prospective franchisees because it affects how Carbones Pizzeria reports its financial performance. Cash equivalents are included in the company's overall cash position, which can impact key financial ratios and metrics. Franchisees may want to understand the company's cash management practices and how they define and utilize cash equivalents.

It is worth noting that the FDD also mentions that the company holds cash and cash equivalents that at times may exceed federal insurance limits. However, Carbones Pizzeria does not anticipate any losses related to this balance. This indicates that the company is aware of the potential risks associated with holding large cash balances and has taken steps to mitigate those risks.