Multiples Used to Estimate Automotive Dealerships Market Value

BVResearch Pro
American Society of Appraisers Business Valuation Review™
Winter 2018 Volume 37, Issue 4 pp. 144-149
Ginette McManus, PhD
Rajneesh Sharma, PhD
Ahmet Tezel, PhD
5511 Motor Vehicle Dealers (New and Used)
441110 New Car Dealers , 441120 Used Car Dealers
industry analysis
goodwill, auto dealership, discounted cash flow (DCF), franchise, initial public offering (IPO), earnings before interest, taxes, depreciation, amortization (EBITDA), earnings before interest, taxes (EBIT), market value, blue sky

Summary

Practitioners use goodwill multiples for valuing automobile dealerships. In this paper, the valuation accuracy of five goodwill multiples and seven more traditional multiples that can be used for estimating the market value of the equity of car dealerships is assessed during the 2010–2016 period. Our results support that the goodwill multiples provide the smallest estimation errors in valuing the market value of automobile dealerships.
Multiples Used to Estimate Automotive Dealerships Market Value
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