How does Deck Medic mitigate credit risk associated with its cash deposits?

Based on the 2024 Deck Medic Franchise Disclosure Document, the company considers cash equivalents to include bank accounts and cash in transit for bank deposits with maturities of three months or less. This accounting policy, which conforms to generally accepted accounting principles in the United States, is part of the company's broader financial statement preparation. Management is responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Deck Medic's financial statements are audited by an independent auditor, Metwally CPA PLLC, who issues an opinion on whether the statements present fairly the company's financial position and cash flows in accordance with accounting principles generally accepted in the United States of America. The auditor's responsibilities include obtaining reasonable assurance about whether the financial statements are free from material misstatement, whether due to fraud or error. They also evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management.

Furthermore, management must evaluate whether there are conditions or events that raise substantial doubt about Deck Medic's ability to continue as a going concern within one year after the date that the financial statements are available to be issued. This evaluation is crucial for maintaining the integrity and objectivity of the financial statements. The auditor's report includes their opinion on the financial statements, providing an additional layer of assurance.

While the FDD excerpts detail Deck Medic's accounting policies and auditing procedures related to cash and cash equivalents, they do not specifically describe strategies to mitigate credit risk associated with cash deposits. A prospective franchisee should directly ask Deck Medic's management about their specific practices for managing and safeguarding cash deposits to minimize potential credit risks.