What does the Gokhale Method consider to be cash equivalents?

According to Gokhale Method's 2024 Franchise Disclosure Document, the company's accounting policies define cash equivalents for the statement of cash flows. Gokhale Method considers highly liquid investments with original maturities of three months or less to be cash equivalents. In addition to these investments, cash on hand is also classified as a cash equivalent.

For a prospective franchisee, understanding this definition is important for interpreting Gokhale Method's financial statements. It provides clarity on how the company manages and reports its short-term assets. This definition is based on generally accepted accounting principles in the United States of America.

It is important to note that the classification of investments as cash equivalents is tied to their high liquidity and short maturity period. This means that the investments can be easily converted into cash and are relatively insensitive to changes in interest rates. This information is typically found within the notes to the financial statements, offering additional context to the figures presented.