What was the reported goodwill value for Management Recruiters as of December 31, 2022?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
We have served as the Company's auditor since 2017.
/s/ Plante & Moran, PLLC
Denver, Colorado March 21, 2023
HireQuest, Inc. Consolidated Balance Sheets
| (in thousands except par value data) | December 31, 2022 | December 31, 2021 | |
|---|---|---|---|
| ASSETS | |||
| Current assets | |||
| Cash | $ | 3,049 | $ 1,256 |
| Accounts receivable, net of allowance for doubtful accounts | 45,728 | 38,239 | |
| Notes receivable | 817 | 1,481 | |
| Prepaid expenses, deposits, and other assets | 1,833 | 659 | |
| Prepaid workers' compensation | 503 | 369 | |
| Total current assets | 51,930 | 42,004 | |
| Property and equipment, net | 4,353 | 4,454 | |
| Workers' compensation claim payment deposit | 1,231 | 948 | |
| Franchise agreements, net | 23,144 | 18,848 | |
| Other intangible assets, net | 10,690 | 6,228 | |
| Goodwill | 5,870 | - | |
| Other assets | 325 | 334 | |
| Notes receivable, net of current portion and reserve | 2,675 | 2,686 | |
| Intangible assets held for sale - discontinued operations | 3,065 | 1,850 | |
| Total assets | $ | 103,283 | $ 77,352 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||
| Current liabilities | |||
| Accounts payable | $ | 448 | $ 1,126 |
| Line of credit | 12,543 | 171 | |
| Term loans payable | 704 | 210 | |
| Other current liabilities | 3,408 | 2,658 | |
| Accrued wages, benefits and payroll taxes | 5,602 | 3,687 | |
| Due to franchisees | 9,846 | 7,496 | |
| Risk management incentive program liability | 877 | 1,632 | |
| Workers' compensation claims liability | 3,352 | 4,491 | |
| Total current liabilities | 36,780 | 21,471 | |
| Term loans payable, net of current portion | 3,291 | 2,856 | |
| Workers' compensation claims liability, net of current portion | 2,573 | 3,759 | |
| Deferred tax liability | 60 | 473 | |
| Franchisee deposits | 2,325 | 2,058 | |
| Total liabilities | 45,029 | 30,617 | |
| Commitments and contingencies (Note 11) | |||
| Stockholders' equity | |||
| Preferred stock - $0.001 par value, 1,000 shares authorized; none issued | - | - | |
| Common stock - $0.001 par value, 30,000 shares authorized; 13,918 and 13,745 shares issued, respectively | 14 | 14 | |
| Additional paid-in capital | 32,844 | 30,472 | |
| Treasury stock, at cost - 40 shares | (146) | (146) | |
| Retained ear |
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 65–66)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, the goodwill value as of December 31, 2022, was $5,870 thousand. Goodwill, in this context, represents the excess of the purchase price over the fair value of identifiable assets acquired during business combinations. Management Recruiters assesses goodwill for impairment at least annually, or when circumstances suggest an impairment may exist.
For a prospective Management Recruiters franchisee, understanding the goodwill value can provide insight into the company's acquisition strategy and the value it places on acquired businesses. The increase in goodwill from the previous year (as the 2021 value was not provided in this excerpt) suggests that Management Recruiters has made acquisitions that contribute to its overall value.
It's important to note that goodwill is subject to impairment, which could affect the company's financial position. Franchisees should consider the factors that could lead to impairment, such as changes in the business climate or competition, and how these factors might impact Management Recruiters' financial stability. Reviewing the complete financial statements and understanding the company's accounting policies related to goodwill is crucial for making an informed investment decision.