What does Jersey Mikes consider to be cash equivalents in its accounting policies?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
ies at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents—Cash includes balances on deposit at US banks. Highly liquid investments purchased with an original ma
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mike's 2025 Franchise Disclosure Document, cash equivalents are defined as highly liquid investments with an original maturity of three months or less. Cash balances are inclusive of deposits held at U.S. banks.
This definition is important for prospective franchisees because it clarifies how Jersey Mike's manages and reports its liquid assets. Understanding this accounting policy can help franchisees interpret the company's financial statements more accurately. Cash and cash equivalents are essential for covering immediate obligations and short-term investments.
It's worth noting that while Jersey Mike's considers investments with maturities of three months or less as cash equivalents, the actual amount held in cash equivalents can vary significantly from year to year. For example, the FDD notes that as of December 31, 2023, Jersey Mike's had approximately $5,300,000 in cash equivalents. This figure provides context for the scale of liquid assets the company maintains.