Kansas City, Mo. — Equipment Dealer Consulting, LLC, the certified public accounting firm affiliated with Western Equipment Dealers Assn. (WEDA), has released the 2017 Cost of Doing Business Study.
This unique research effort for equipment dealers represents the most up-to-date comparative financial performance information available anywhere. “The Cost of Doing Business study is important to the industry because it is the only financial and business operation study that includes dealers from all brands across the United States and Canada,” says John Schmeiser, CEO, WEDA. “The study is used by dealers to compare financial performance against other dealers in their region, or at comparable volume levels throughout North America. This valuable tool provides straightforward guidelines for analyzing the profitability of equipment dealerships, thus helping dealers improve their own businesses.”
According to WEDA Chief Financial Officer Curt Kleoppel, who leads the project, “Of equal importance, especially if a dealer principal is nearing an exit from the operation, the study is used for valuations, estate planning and mergers across North America. It is also used by our Dealer Institute trainers/consultants to establish benchmarks, comparisons and ratios for equipment dealers.”
Highlights from the 2017 Study
-
Total equity percentage increased 0.71% from a year ago and gross profit margin percentage increased 0.6 percent from last year.
- Total inventory as a percent of assets decreased 2.23%, indicating dealers are controlling their new and used inventory.
The Western Equipment Dealers Assn. (WEDA), in cooperation with other participating dealer associations and their members, compiles data from independent dealers who provide detailed financial and operational information for their individual businesses. This confidential information creates average income statements and balance sheets, in addition to key financial performance indicators. “The 2017 edition compiled information from 203 dealers representing approximately 672 locations. Last year, we had 230 dealerships representing 609 locations, an indication consolidation is still happening,” adds Kleoppel.
Participating associations for the 2017 edition are the Deep South Equipment Dealers Assn., Far West Equipment Dealers Assn., Iowa-Nebraska Equipment Dealers Assn., Midwest-SouthEastern Equipment Dealers Assn., Northeast Equipment Dealers Assn., United Equipment Dealers Assn. and the Western Equipment Dealers Assn.
How to Access the Study
To obtain the complete report, dealers must contact their state or regional equipment dealer association. The 2017 report has been sent free of charge to equipment dealers that provided their confidential financial reports for compilation. Non-participating dealers can purchase the results for $200 ($275 in Canada) if they are association members; the report is $450 ($525 in Canada) for nonmembers.
Additional Resources
For questions or to learn more about how to access the survey results, please contact Lonnie Finch, CPA, Equipment Dealer Consulting, LLC at 800-762-5616, email lfinch@westerneda.com
