What was the non-cash lease expense for Engel & Volkers in 2022?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
rehensive loss: | - | - | - | - | (141,272) | (141,272) | | Foreign currency translation | | | | | | | | adjustment | | | | | | | | BALANCE - DECEMBER 31, | 17,143 | $ 171,430 | $ 34,285,342 | $ (17,638,174) | $ (173,649) | $16,644,949 | | 2024 | | | | | | |
ENGEL & VÖLKERS AMERICAS, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Cash flows from operating activities: | |||
| Net income (loss) | $ (4,048,100) | $ 1,761,556 | $ 3,560,109 |
| Adjustments to reconcile net income (loss) to net cash | |||
| provided by operating activities: | |||
| Depreciation and amortization | 2,288,707 | 1,596,741 | 1,002,565 |
| Non-cash lease expense | 422,734 | 432,537 | 467,177 |
| Provision for doubtful accounts | 644,206 | 673,367 | 14,444 |
| Foreign exchange gain on long-term debt | - | - | (15,369) |
| Deferred income taxes | 4,748 | (53,900) | 131,267 |
| Changes in operating assets and liabilities: | |||
| Accounts receivable | (750,778) | (1,113,744) | 203,349 |
| Prepaid commissions | 41,985 | (269,440) | (20,804) |
| Other prepaid expenses | (63,766) | (361,450) | (108,581) |
| Due from affiliates, net | (1,425,055) | (65,316) | 112,966 |
| Prepaid income taxes | 827,611 | 831,019 | (1,658,630) |
| Notes receivable | 1,064,148 | (789,858) | (160,000) |
| Other receivables | (552,774) | 3,000 | 2,000 |
| Deposits | (34) | (32) | (33) |
| Operating lease liability | (429,737) | (429,737) | (412,994) |
| Accounts payable | (410,404) | 403,164 | (366,207) |
| Accrued expenses and other current liabilities | 2,966,698 | (42,193) | (1,580,465) |
| Contract liabilities | (132,172) | 95,856 | 156,569 |
| Other long-term liabilities | 3,065,357 | - | - |
| Income taxes payable | (301,464) | (796,994) | 1,111,599 |
| Net cash provided by operating activities | 3,211,910 | 1,874,576 | 2,438,962 |
| Cash flows from investing activities: | |||
| Additions to property and equipment | (22,791) | (26,523) | (556,206) |
| Capitalized software costs | (1,853,750) | (1,881,771) | (1,650,544) |
| Net cash used in investing activities | (1,876,541) | (1,908,294) | (2,206,750) |
| Cash used in financing activities: | |||
| Repayment of long-term debt | - | - | (308,760) |
| Effect of exchange rate changes on cash | (141,272) | 30,285 | (54,080) |
| Net increase (decrease) in cash and cash equivalents | 1,194,097 | (3,433) | (130,628) |
| Cash and cash equivalents - beginning | 5,037,368 | 5,040,801 | 5,171,429 |
| CASH AND CASH EQUIVALENTS - ENDING | $ 6,231,465 | $ 5,037,368 | $ 5,040,801 |
| Supplemental disclosures of cash f |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, the non-cash lease expense for the year 2022 was $467,177. This figure represents an accounting adjustment that does not involve an actual outflow of cash during that period but reflects the economic impact of the lease on the company's financial statements.
Non-cash lease expenses typically arise from the accounting treatment of operating leases, where the right to use an asset (in this case, office space) is recorded as an asset, and the obligation to make lease payments is recorded as a liability on the balance sheet. The non-cash expense is then recognized over the lease term as the asset's value is amortized. This accounting practice aims to provide a more accurate representation of a company's financial obligations and asset utilization.
For a prospective Engel & Volkers franchisee, understanding non-cash expenses is crucial for interpreting the franchisor's financial statements accurately. While non-cash expenses do not directly impact cash flow, they do affect profitability metrics and can provide insights into the company's long-term financial commitments and asset management strategies. Reviewing these figures over several years, as presented in the FDD, can help potential franchisees assess the stability and financial health of Engel & Volkers.