What does Gokhale Method's cash and cash equivalents consist of?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
For the purposes of the statement of cash flows, the Company considers all highly liquid investments and investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents consist of cash on hand.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, the company considers highly liquid investments with original maturities of three months or less as cash equivalents for the statement of cash flows. Specifically, Gokhale Method's cash and cash equivalents consist of cash on hand. This is a standard accounting practice.
For a prospective franchisee, understanding this definition is important for interpreting Gokhale Method's financial statements. It means that when reviewing the company's balance sheets and cash flow statements, the "cash and cash equivalents" line item primarily reflects the actual cash the company has readily available.
This definition excludes assets that are not immediately convertible to cash or have longer maturity periods. Franchisees should be aware that this definition is consistent with standard accounting principles, providing a clear picture of the company's liquid assets.