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COVID-19’s Ongoing Impact on Franchise Auto Dealership Valuations (2341Q)

Course CPE: 1 hour
Field(s) of Study: Accounting–1 hr
Program Level: Intermediate
Prerequisites: Previous training or research on subject matter being taught. Such persons are often at a mid-level within the organization, with operational and/or supervisory responsibilities.
Advanced Preparation: None
Delivery Method: QAS Self-Study

Item Number: 26BV0722COI
Shipping Weight: 0lbs. 0oz.

Price: $99.00

Recording Date: July 22, 2026

Presenter: Louis Young and Tom Reck

Program Description:

The COVID-19 pandemic caused turmoil in the valuation of automobile franchises. Valuation analysts were faced with challenges such as determining the proper income stream to use in a rapidly changing marketplace. Changes in historical pre-tax earnings percentages during COVID-19 produced corresponding changes in valuations. Additionally, assessing risk to develop a capitalization rate was also a challenge. A saving grace during the pandemic was the Blue Sky multiples tracked by market participants effectuating transactions. As a result, Blue Sky multiples became vital in preparing valuations, as they captured risk, which varied throughout the duration of the pandemic. After an initial decline in market multiples, a quick rebound occurred when changes in the income stream, as discussed above, became evident. At a certain point, Blue Sky multiples exceeded pre-pandemic levels. As we moved out of the COVID-19 period, pre-tax earnings percentages began to resemble pre-COVID-19 levels, while market multiples continued to capture the risks associated with automobile franchises in an ever-evolving industry.

Takeaways:
Attendees should gain a better understanding of the financial condition of the automotive retail industry during and surrounding the COVID-19 period. They should also understand the issues and challenges that arose in the valuation process. Attendees will learn whether the industry has, in fact, returned to normal.

After completing this course, you will be able to:

Determine earnings prior, during, and after the COVID-19 period
Identify business multiples in the automotive retail industry
Recognize the use of a Blue Sky multiple as a method to capitalize cash flow
Determine the trends needed to establish values
Identify a possible approach to an appropriate method for valuation

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The Consultants’ Training Institute (CTI) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

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COVID-19’s Ongoing Impact on Franchise Auto Dealership Valuations (2341Q)

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