For the consolidated statements of cash flows, what does Pump It Up consider to be cash equivalents?

According to Pump It Up's 2025 Franchise Disclosure Document, the company's consolidated statements of cash flows consider "all highly liquid debt instruments purchased with original maturities of 90 days or less to be cash equivalents." This definition is important for understanding the company's financial statements, as it clarifies how Pump It Up categorizes assets when reporting cash flow.

For a prospective franchisee, this definition provides insight into Pump It Up's accounting practices. Cash equivalents are short-term, highly liquid investments that are easily convertible to cash and pose minimal risk of value change. By including these instruments in its cash flow statements, Pump It Up provides a more comprehensive view of its liquid assets.

This is a fairly standard accounting practice. Most companies consider investments with short-term maturities (typically three months or less) as cash equivalents due to their liquidity and low risk. Understanding this definition helps potential franchisees better interpret and analyze Pump It Up's financial statements, giving them a clearer picture of the company's financial health and stability.