Car Dealerships Ford Escape SE in Colfax WI

Car Dealerships Ford Escape SE in Colfax WI

February 15, 2018
Posted by: solfa_admin

Most business valuations are driven substantially by the company’s historical financial statements, tempered by other factors such as: location, brand name, management and such. In truth and in fact, the dealership’s balance sheet represents less than half the information necessary to properly value an automobile dealership. The balance sheet is but a starting point from which a number of factors must be How to Find Unadvertised Discounts on New Cars Ford Escape SE Colfax WI 54730 added and subtracted in order to determine the true value of the assets.

Valuing new car dealerships has to do with projecting future profits and opportunities based upon the “dynamics” of the particular dealership being valued and of the automobile business itself.

The Internal Revenue Service recognizes that valuations include more than financial statements: “The appraiser must exercise his judgment as to the degree Ford Escape SE Colfax WI 54730 of risk attaching to the business of the corporation which issued the stock, but that judgment must be related to all of the other factors affecting the value.” Revenue Ruling 59-60, Section 3.03.

DEFINITION OF MARKET VALUE

The definition of market value according to the American Institute of Real Estate Appraisers’ Dictionary of Real Estate Appraisal, is: “The most probable price in cash, terms Pros and Cons of Buy Here Pay Here Car Dealerships Ford Escape SE Colfax WI 54730 equivalent to cash, or other precisely revealed terms, for which the appraised property will sell in a competitive market under all conditions requisite to fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self interest, and assuming that neither is under duress.” American Institute of Real Estate Appraisers, The Dictionary of Real Estate Appraisal. (Chicago: American Institute of Ford Escape SE Colfax WI 54730 Real Estate Appraisers, 1984), 194 195.

In Revenue Ruling 59-60, the Internal Revenue Service defines “fair market value” as follows: “…the price at which the business would change hands between a willing buyer and a willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge and Ford Escape SE Colfax WI 54730 relevant facts.”

The purpose of Revenue Ruling 59-60 is to outline and review in general the approach, methods and factors to be considered in valuing shares of the capital stock of closely held corporations.

The methods discussed in the Revenue Ruling apply to the valuation of corporate stocks on which market quotations are either unavailable or are of such scarcity that they do not Ford Escape SE Colfax WI 54730 reflect the fair market value.

The Ruling goes on to state that no set formula can be devised to determine fair market value of closely held stocks and that the value will depend upon such considerations as:

(a) The nature of the business and the history of the enterprise from its inception.

(b) The economic outlook in general and the condition and outlook of Ford Escape SE Colfax WI 54730 the specific industry in particular.

(c) The book value of the stock and the financial condition of the business.

(d) The earnings capacity of the company.

(e) The dividend-paying capacity. The ability to pay dividends is often more important than a company’s history of distributing cash to shareholders, especially when valuing controlling interests.

(f) Whether or not the enterprise has goodwill or Ford Escape SE Colfax WI 54730 other intangible value.

(g) Sales of the stock and the size of the block of stock to be valued.

(h) The market price of stocks of corporations engaged in the same or a similar line of business having their stocks actively traded in a free and open market, either on an exchange or over-the-counter. With respect to an individual dealership sale, the Ford Escape SE Colfax WI 54730 best comparable is the amount the public company paid or received for buying or selling a similar dealership, not what the public company’s stock value or earnings multiple, per se, that is reflected on the stock exchange.

In practice, in arriving at the fair market value of a new car dealership, several different formulas have been used:

1. Return on Investment (or earnings valuation) Ford Escape SE Colfax WI 54730 Formula: The value of a business to a particular purchaser based upon a return on investment analysis. This value varies from purchaser to purchaser, according to the purchaser’s investment criterion, and it may or may not reflect fair market value. The National Automobile Dealers Association (NADA) refers to this value as “Investment Value.” A Dealer Guide to Valuing an Automobile Dealership, NADA Ford Escape SE Colfax WI 54730 June 1995, Revised July 2000.

The capitalization rate is determined by the stability of the dealership’s earnings and the risk involved in the automobile business at the time of sale, investment, or valuation. This method is highly subjective as the capitalization rate is based upon the particular appraiser’s perception of the risk of the business; consequently, the lower the appraiser perceives the risk, Ford Escape SE Colfax WI 54730 the lower will be the capitalization rate and the higher will be the price he would expect a potential purchaser to pay for the business.

In short, the capitalization rate is the appraiser’s opinion as to a rate of return on investment that would motivate a prospective purchaser to buy the dealership. Considerations include those specified in Revenue Ruling 59-60, as well as Ford Escape SE Colfax WI 54730 available rate of return on alternative investments.

2. Adjusted Net Worth Formula: Net worth of the company, adjusted to reflect the appraised value of the assets used in the day to day operations of a business, assuming that the user or purchaser will continue to make use of the assets. To this “net worth” value will be added blue sky or goodwill, if Ford Escape SE Colfax WI 54730 any. The “Adjusted Net Worth Formula” is the most common method used in purchasing and selling a new car dealership.

3. Orderly Liquidation Formula. This method values the assets as if all of them had to be sold – not at a “fire sale,” but in an orderly manner and without time constraints. Normally, if the dealership is profitable, some value will still Ford Escape SE Colfax WI 54730 be placed upon goodwill.

4. Forced Liquidation. The lowest of all values, forced liquidation means that all of the assets must be sold at a forced sale such as an auction, creditors’ sale or by order of a bankruptcy court. A bankruptcy proceeding regarding a new car dealership almost never brings goodwill. This might be the most appropriate formula if the dealership has Ford Escape SE Colfax WI 54730 no lease (or only a short term remaining on its lease) and cannot, as a practical matter, relocate.

5. Income Formula. The income formula is basically taking the store’s earnings and multiplying it by an appropriated capitalization rate. The trick here is the definition of “earnings.” In determining “earnings” a perspective purchase could use any combination of the following:

(a) current earnings

(b) average Ford Escape SE Colfax WI 54730 earnings – add the last five years together and divide by 5

(c) weighted average earnings – usually an inverted weight with the current year multiplied by five, last year by four, the year before last by three, four years ago by two, five years ago by one, then adding them together and dividing by 15

(d) cash flow – net income Ford Escape SE Colfax WI 54730 plus agreed add-backs such as depreciation, LIFO, personal expenses, excess bonuses and such

(e) forecasted earnings – future projected earnings discounted to present day value.

6. Fair Value. NADA also refers to a third value in addition to “Market Value” “Investment Value,” which it calls “Fair Value.” NADA describes “Fair Value” as being “…primarily used when a minority shareholder objects to a proposed Ford Escape SE Colfax WI 54730 sale of the company in assessing liquidating damages.” and defines it as: “The value of the minority interest immediately before the transaction to which the dissenter objects, excluding any appreciation or depreciation in anticipation of the transaction and without reference to either a minority or non-marketability discount.”

The NADA guide states: It is not common for auto dealers to run across this particular Ford Escape SE Colfax WI 54730 valuation standard. This author has never used, nor has ever seen this value used with respect to valuing automobile dealerships.

As can be seen in this report, this author in discussing valuations excludes what NADA describes as “Fair Value”.

7. The Greater Fool Theory. The National Automobile Dealers Association publication (A Dealer Guide to Valuing an Automobile Dealership, NADA June 1995), bemuses, in part: Ford Escape SE Colfax WI 54730 “A Rule of Thumb is more properly referred to as a ‘greater fool theory.’ It is not ‘valuation theory, however.” (In its “Valuing an Automobile Dealership: Update 2004” NADA dropped the reference to “fool” and simply states that the theory is “. . . rarely based upon sound economic or valuation theory,” but advises sellers to “Go for it, and maybe someone Ford Escape SE Colfax WI 54730 will be stupid enough to pay [it].”

The considerations for valuing new car dealerships are more complex than those used for valuing most other businesses. Dynamics such as the unique requirements of automobile manufactures and distributors can limit the amount of monies that may be paid for a dealership, regardless of what perspective purchasers may offer to pay for the store.

Therefore, the value Ford Escape SE Colfax WI 54730 of a new car dealership varies based upon the needs and ability of the purchaser and, consequently, the same dealership could have two different values to two different purchaser and both values would be correct.

Thus, our valuation of the subject dealership should be considered in the context and limitations of the facts and history of new car dealership sales as delineated herein.

Ford Escape SE Colfax WI 54730

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Colfax Chevrolet, Inc



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    Car Dealerships Ford Escape SE in Colfax WI

    February 15, 2018
    Posted by: solfa_admin

    It can be intimidating to go to used car dealers looking for the vehicle you need. But with the proper knowledge of what to look for, you can go with the confidence to get exactly what you want. Before heading out, you’ll need to look into what’s available. At a dealership, test out a few key features of any vehicle you’re interested in to ensure its quality. An Introduction To Used Car Dealers Ford Escape SE Colfax WI 54730 Finally, when you think you’ve found the perfect fit, take it out for a test drive.

    Do the Research

    Whatever you do, don’t go to used car dealers with no idea what they have or what you want. Most dealerships have a website you can comb through so that you have some idea of what to expect when you go there. When online, be sure to familiarize yourself with Ford Escape SE Colfax WI 54730 not only what is available but also with what features you find most desirable. Some features to keep note of are the vehicles’ model, price range, and condition.

    It may seem like a lot of effort, but it will be worth it: when you arrive at dealerships, you’ll already have a mental repository of what you’re looking for in a vehicle. You will have an idea of reasonable Car Dealerships in the Strangest Places Ford Escape SE Colfax WI 54730 price ranges given a vehicle’s model and condition. You can tell dealers exactly what you’re looking for, saving a lot of time and hassle.

    Know What to Look For

    If you think you have found the vehicle for you, it is important that you know how to inspect it for possible damage while still at the dealership. Even if you don’t know much about cars, there are a few Ford Escape SE Colfax WI 54730 key things you ought to look at:

    The first is the front fender. Look at the trim lines to make sure they are straight. Check for any offset doors or fenders, as these could indicate frame damage.

    Next, check the spots in the engine bay where the metal struts come together to make sure they are straight and have had no recent welding done to them. Look for rust, Ford Escape SE Colfax WI 54730 especially under the car or in the wheel wells. Rust can sometimes be dealt with, but it’s better not to have to deal with it at all.

    Be sure to check the fluids, especially brake fluid. When you pull the dipstick out, the fluid should be clear or yellowish. If it’s dark, you may have to bleed the brake system, which costs time and money.

    Next, check the vehicle’s Ford Escape SE Colfax WI 54730 oil. If the oil is thick-like it’s almost more solid than liquid-that could indicate a blown head gasket, which, again, could be costly to repair.

    Finally, take a look inside the vehicle for any stains or cigarette burns on the seats.

    Take It for a Test Drive

    When you have found the vehicle you think you want, get it off the used car dealer’s lot and see what it’s like Ford Escape SE Colfax WI 54730 on the road. If possible, try to get it on the highway: the faster, the better. You want to make sure the vehicle in question can handle high speeds, turns, and braking. If, for instance, you get it on the highway, and it starts shaking, that could indicate bad alignment.

    You don’t want to be too rough on a test drive (you could get sued if something happens Ford Escape SE Colfax WI 54730 along the way) but don’t be too gentle either. You want to know you’re getting an automobile that can handle itself.

    Looking for a used car doesn’t have to be a hassle. Used car dealers can help you navigate dealerships once you’re there, but it’s important to know what you’re looking for and what to expect before going in. That way, you can ensure that you are getting Ford Escape SE Colfax WI 54730 the best possible deal on a good quality vehicle.

    Business Results 1 - 10 of 1

    Colfax Chevrolet, Inc



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