What is included in cash equivalents for Dq Treat's accounting purposes?

According to Dq Treat's 2025 Franchise Disclosure Document, cash equivalents include all short-term investments with an original maturity of 90 days or less. These cash and cash equivalents are recorded at cost, which approximates their fair value.

For a prospective Dq Treat franchisee, this definition is important for understanding the company's financial statements. Cash equivalents are highly liquid assets that Dq Treat can quickly convert to cash. The inclusion of short-term investments (those maturing in 90 days or less) in this category indicates a conservative approach to managing liquid assets.

The fact that these assets are recorded at cost, which approximates fair value, suggests that Dq Treat's accounting practices are straightforward and transparent. This policy minimizes potential discrepancies between the book value and the actual market value of these assets. Franchisees reviewing Dq Treat's financial health can rely on these figures as a reasonable representation of the company's liquid assets.

Furthermore, Dq Treat mitigates credit risk by placing its cash equivalent investments with high-credit-quality financial institutions and limits the amount of credit exposure to any one financial institution. This reduces the risk of losses on these investments, contributing to the overall financial stability of the company.