DEPARTMENTAL ACCOUNTABILITY THROUGH FINANCIAL STATEMENT ANALYSIS
Monday January 1, 2018
This course utilizes a layered and interactive learning approach to mitigate any intimidating perceptions of novice learners. Basic understanding of navigating the Financial Statement (either OEM-specific or generic) enables learners to identify the locations of each dealership department’s categories/line items and recognize dealership situations. Content shifts to the flow of automotive accounting, following the respective journeys of source documents through the dealership accounting system. Next, learning is “reverse-engineered” by taking entries from the Balance Sheet and following their paths backwards to their original source documents. This process ensures that learners grasp the flow of accounting literally, frontwards and backwards. The final learning activity evaluates each department in a dealership using a specific methodology. Critical thinking skills obtained from this activity are necessary to quickly assess a dealership’s financial status and suggest potential solutions to real-life situations and challenges.
- OEM Dealer Contact Personnel
- Dealership Management
- The flow of automotive accounting
- Working Capital definitions and implications
- Gross, Net Profit, and Operating Profit definitions
- Financial Statement navigation
Dealership Financial Statement, pre-class input sheet, or sample statement provided
- Analyze a dealership’s financial performance after applying the core equations.
- Conduct Gross and Net Profit initial assessments to investigate profit opportunities.
- Determine the purpose of LIFO and its holistic impact on the dealership.
- Analyze the New Vehicle, Pre-Owned Vehicle, Service, and Parts Departments using the Operating Profit Model to determine solutions to improve current performance.
- Analyze the increased role of Pre-Owned Vehicle Turns, Inventory Days Supply, and New-to-Used Ratio on Volume, Gross, and Net Profit.
- Calculate and compare service expenses and profitability to OEM profile to determine opportunity for profit and operational improvement.
- Evaluate a dealer’s New Vehicle Sales Model (Volume vs. Gross Profit) to see if current sales performance can be improved.
- Compare the difference between ‘Mark-up’ and ‘Margin’ to ensure that parts are properly priced to achieve gross profit objectives.