D.T. MURPHY & COMPANY, LLC

Automobile Dealership Brokerage, Real Estate, Appraisals & Consulting

 

 

Daniel T. Murphy

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Selling Your Dealership


We are working with an active database of qualified buyers who are willing to pay top dollar to purchase a dealership. D.T. Murphy maintains a professional approach to selling dealerships while always maintaining confidentiality.  The process includes an in-depth analysis of your business including current and potential performance to determine a market value. This is done by a review of various financial indicators.

The most common approach in determining the intangible blue sky/goodwill value is the income approach. Simply put, the dealerships average adjusted net earnings over a period of five years are applied against an earnings multiple or a capitalization rate, which then establishes the blue sky/goodwill value of the business. Adjustments to the dealerships earnings may include excessive owners salary, rent which does not reflect the property at its true market value or LIFO adjustments. Adjustments to the balance sheet of the financial statement must reflect the business assets at their true value. Typical adjustments would be in the used vehicle and in the parts inventories; old receivables should be written down.

In addition, we utilize the National Automobile Dealer Association (NADA) Guide to Valuing an Automobile Dealership, which is a general discussion of various approaches to valuing automobile dealerships, and as such, validates our valuation approach.

Seller's  must provide certain documents and information so that we may properly prepare a prospectus for review by qualified buyers. Click on the link below  for a list of necessary documents.

Seller's checklist

 

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