What does Chocolate Fish Coffee consider to be cash equivalents?

According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, cash equivalents are defined within the notes to the financial statements. Specifically, Chocolate Fish Coffee considers cash equivalents to include all cash balances and highly liquid investments.

For a prospective franchisee, this definition is important because it clarifies how Chocolate Fish Coffee accounts for its liquid assets. Understanding this accounting policy can help franchisees better interpret the company's financial statements and assess its financial health.

The FDD specifies that these highly liquid investments must have maturities of three months or less from the date of purchase to be considered cash equivalents. This is a fairly standard accounting practice, as it ensures that these investments can be quickly converted to cash if needed. This definition provides transparency into Chocolate Fish Coffee's financial reporting and risk management practices.