Used Car Lot or Dealership: Financial Model and DCF Analysis
Latest Updates: monthly and annual three statement model added as well as a capitalization table.
Video Walkthrough:
Running a used car lot or a used car dealership is fairly straightforward as far as the main gross revenue logic goes. At a high level, the assumptions let the user define average cost of up to 20 car types. Each has a defined sale count per month over 5 years, start month, and average cost to acquire. Then, by defining a desired markup for each type, the average sale price will be calculated per car type. This is how revenue and cost of goods sold are defined.
Other global assumptions that wrap around that logic include the start year of the forecast, the funding amount by traditional lending if applicable and the remaining cash required to survive after accounting for a reserve (leveraged and unleveraged scenarios).
There is automation logic behind the initial purchase of car inventory and the resulting cash flow vs. cost of goods sold is reconciled on the cash flow per month and year. Operating expenses and other startup costs and capex can be defined on their own schedules.
Once everything has been defined on the revenue and cost assumptions, a monthly and annual pro forma will automatically populate as well as an executive summary of the main line items as well as a DCF Analysis. Terminal value can be defined based on an EBITDA or revenue multiple.
Visualizations were built to show the story of a given configuration and final return summaries are displayed side-by-side for leveraged vs. unlevered. This includes IRR (internal rate of return), ROI, Net cash returned, remaining debt balance, and cash requirement to launch and survive.
