How much was the accumulated depreciation for Dollar Rent A Car as of December 31, 2023?
Dollar_Rent_A_Car Franchise · 2025 FDDAnswer from 2025 FDD Document
ange and evaluating the methods used by management and the reasonableness of the assumptions used. We compared the Company's reserve to estimates of the liability developed by our actuarial specialists based on the underlying claims data and independently selected assumptions.
/s/ Ernst & Young LLP
We have served as the Company's auditor since 2019.
Tampa, Florida February 18, 2025
THE HERTZ CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(In millions, except par value and share data)
| ember 31, 2024 | Dec | ember 31, 2023 | |
|---|---|---|---|
| ASSETS | |||
| Cash and cash equivalents | $ 591 | $ | 764 |
| Restricted cash and cash equivalents: | |||
| Vehicle | 258 | 152 | |
| Non-vehicle | 283 | 290 | |
| Total restricted cash and cas |
Source: Item 23 — RECEIPTS (FDD pages 102–301)
What This Means (2025 FDD)
According to Dollar Rent A Car's 2025 Franchise Disclosure Document, as of December 31, 2023, the accumulated depreciation was $2,155 million for revenue earning vehicles. This figure represents the total depreciation expense recognized over the useful life of Dollar Rent A Car's vehicles up to that date. It is a contra-asset account, meaning it reduces the reported value of the vehicles on the balance sheet.
For a potential Dollar Rent A Car franchisee, understanding accumulated depreciation is crucial because it impacts the net value of the assets. The difference between the original cost of the vehicles and the accumulated depreciation provides a clearer picture of the vehicles' current book value. This is particularly important in a capital-intensive business like car rental, where the value of the vehicle fleet is a significant component of the company's overall financial health.
Furthermore, the FDD also indicates that as of December 31, 2023, the total revenue earning vehicles were valued at $16,806 million before deducting the accumulated depreciation. After subtracting the accumulated depreciation of $2,155 million, the net value of the revenue earning vehicles was $14,651 million. This net value is what would be reflected on Dollar Rent A Car's balance sheet, providing a more accurate representation of the company's assets.
It is important to note that depreciation methods and rates can significantly affect the reported accumulated depreciation. Dollar Rent A Car's method for calculating depreciation on non-program vehicles involves significant estimation and judgment regarding residual values, as discussed in the provided notes. Prospective franchisees should inquire about the specific depreciation methods used and how these methods could impact the financial statements.