Expense & Profitability Review Services
Strengthening Enterprise Value Before a Transition
In dealership transitions, value is not created at the closing table—it is revealed in the financials.
At Melton Advisors, our Expense & Profitability Review is designed to help dealership owners understand how operating expenses, margin structure, and normalization assumptions affect enterprise value long before a buy-sell or exit process begins.
This is not about cutting costs for the sake of cutting costs. It is about ensuring the business reflects defensible, sustainable earnings when it matters most.
Why Expense Review Matters in Exit Planning
During a sale, recapitalization, or ownership transition, buyers and advisors will scrutinize expenses to determine normalized EBITDA. Expenses that are unclear, excessive, or poorly documented can materially reduce valuation—or create leverage against the seller.
Common issues we see include:
Legacy expenses that no longer serve the business
Personal or discretionary items embedded in operations
Above-market vendor contracts or inefficiencies
Inconsistent add-back assumptions
Financials that are not positioned for buyer diligence
Left unaddressed, these issues can quietly erode value.
What the Expense & Profitability Review Covers
Our review focuses on enterprise-level readiness, not day-to-day management. Typical areas of analysis include:
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Operating Expense Structure
Evaluation of fixed and variable expenses to identify normalization issues and risk areas likely to be scrutinized in diligence.
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EBITDA Quality & Add-Back Readiness
Assessment of discretionary, non-recurring, and owner-related expenses to ensure add-backs are defensible and well-documented.
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Margin & Cost Consistency
Review of departmental margins and cost trends to identify volatility that could raise buyer concerns.
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Vendor & Contract Review (High-Level)
Identification of long-term contracts or above-market arrangements that may impact valuation or buyer perception.
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Exit Readiness Perspective
Analysis through the lens of how a buyer, lender, or investor will interpret the financials—not how they are viewed internally.
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Producer-to-Overhead Ratio
We analyze your producer-to-overhead ratio to ensure your dealership maintains strong gross absorption and sustainable net profitability.
What This Review is Not
To avoid confusion, this service is not:
Day-to-day operational management
Line-item cost-cutting mandates
Replacement for internal accounting
A one-size-fits-all efficiency program
Our role is advisory—focused on value preservation and defensibility, not micromanagement.
Who This is For
Our expense and profitability review is designed for:
Dealers planning a sale or recapitalization within 1–5 years
Owners who want to maximize valuation before going to market
Family-owned dealerships preparing for succession
Operators who want clarity before engaging buyers
Learn More
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The Expense & Profitability Review often follows the Dealer Capital Review.
The Dealer Capital Review evaluates capital structure, real estate, and liquidity
The Expense Review ensures earnings quality supports enterprise value
Together, they create a more complete picture of exit readiness and capital positioning.
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Because expense discipline is most effective when done early, quietly, and strategically—before outside parties are involved.
Appropriately handled, expense review:
Improves valuation defensibility
Reduces buyer retrades
Strengthens negotiating position
Preserves control over timing
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For most owners, the right starting point is a Dealer Capital Review, followed by targeted expense and profitability analysis where appropriate.
Better preparation leads to better outcomes.
