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.