Dealer Financial Statement Glossary
This glossary explains the terms that show up on a franchised dealer's factory financial statement, in plain words, with the Pocket20 benchmark where one applies. Each term links to a fuller guide.
Whole store
Gross profit. Sales minus cost of sales, by department and in total. Everything else on the statement is paid out of it.
Net profit. What is left after every expense. The bottom line.
Net-to-gross. Net profit as a share of total gross. 20% is the healthy whole-store bar, 30% best in class. Net-to-gross
Net profit as a percent of sales. Net profit divided by total sales. Net profit percent of sales
Personnel expense as a percent of gross. Pay as a share of gross. At or under 50% for a franchised store. Personnel expense
Year to date (YTD). The running total since January. Use it for decisions instead of a single month.
Fixed operations
Absorption. Fixed-ops gross (service, parts and body) divided by the store's overhead. 100% is the gold standard. Service absorption rate
Labor gross percent. Labor gross divided by labor sales, by pay type. 78% or better for customer-pay, warranty and internal. Service labor gross profit
Effective labor rate (ELR). What the shop actually collects per hour, compared to the posted door rate. 85% to 95% of the door rate on customer-pay work.
Unapplied labor. Technician time paid for but billed to no repair order. Flagged past $5,000 year to date. Unapplied labor
Parts gross percent. Parts gross divided by parts sales, about 40%. Parts gross and turns
Parts pricing matrix. The markup table that sets retail parts prices by cost band. Parts pricing matrix
Variable operations
Front gross. Gross on the vehicle itself, before F&I. New vehicle gross per unit
F&I per vehicle retailed (PVR). Finance and insurance income per vehicle sold. F&I per vehicle retailed
Days' supply. How long inventory would last at the current selling pace. About 45 days new, 30 days used. Dealership days' supply
Aged inventory. Units in stock past a set age. For used, the hard line is no units over 60 days. Used car days' supply and aging
Floor plan interest. Interest on financed inventory, for every day a unit sits. Floor plan interest
Floor plan assistance. The factory's credit that offsets new-vehicle floor plan interest for a period.
Advertising per vehicle. Total advertising spend divided by units retailed. Advertising cost per vehicle
Benchmarking
Benchmark. The bar a line is measured against. A good one names its source.
20 Group. A group of non-competing dealers who compare statements and meet with a moderator. What is a dealer 20 Group?
Composite. A combined report of a 20 Group's statements, showing each member against the group's average and best.
Opportunity. The dollar gap between a line and its benchmark, multiplied by your own volume. Financial statement opportunities
Reading the whole statement
See it on your own statement
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