Aftermarket

NTDA Releases Trailer Dealer Financial Performance Report

August 16, 2007

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According to results of a recently released National Trailer Dealers Association (NTDA) 2007 Dealer Financial Performance Report, dealers are encouraged to look beyond sales totals and examine return on assets (ROA)
as a truer gauge of financial performance.
The report compares the typical NTDA dealer company with sales of $16.5 million (ROA: 7.9 percent) to that of the high-profit NTDA dealer with sales of $4.7 million (ROA: 27.4 percent). ROA is profit before taxes expressed as a percentage of total assets.
The report provides detailed financial results of trailer dealer firms with results based on 2006 income statements balance sheets and operating data provided by NTDA members.
The survey results point out that five critical factors make a difference, and although the high-profit firm seldom performs better on all critical factors, it is the sum total of their performance that produces higher overall results. The critical factors are:
• Sales per Employee measures employee productivity
• Gross Margin Percentage reflects the ability to manage cost of goods sold effectively
• Operating Expense Percentage focuses on expense control
• Inventory Turnover reflects how well inventory is managed
• Average Collection Period reflects accounts receivable collection practices.
Tables and graphs provide guidelines for analyzing profitability among trailer dealer companies.
Survey results are currently restricted to survey participants. Prospective members interested in participating in the 2008 survey are asked to contact NTDA Membership Manager Jim Hamilton at (800) 800-4552, ext. 134, or e-mail [email protected]
The NTDA was established in 1990 and currently represents more than 300 companies throughout the U.S. and Canada that manufacture, install, buy, sell, repair and maintain trailers and accessories. The association maintains its administrative headquarters in suburban Detroit. Its web site is www.ntda.org.

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