What does City Wide Franchise Company, Inc. consider to be cash equivalents?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the company considers cash equivalents to be liquid investments with original maturities of three months or less. These cash equivalents primarily consist of deposit accounts held with financial institutions.
For a prospective franchisee, understanding how City Wide defines cash equivalents is important for interpreting the company's financial statements. Cash and cash equivalents are highly liquid assets that City Wide can readily use to meet its short-term obligations. The amount of cash and cash equivalents a company holds can be an indicator of its financial health and stability.
The FDD also notes that City Wide's cash accounts exceeded federally insured limits by approximately $2,991,000 as of December 31, 2024. This means that a significant portion of City Wide's cash was not protected by federal deposit insurance, which could pose a risk in the event of a financial institution failure. However, this is a common practice for larger companies that require substantial cash reserves for operations and investments.
As of December 31, 2024, City Wide Franchise Company, Inc. had $23,966,250 in cash and cash equivalents, City Wide Franchise of Canada, Inc. had $307,078, and City Wide Franchise International, Inc. had none. After eliminations, the consolidated total for cash and cash equivalents was $24,273,328.