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 Pointe Automotive 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:

🔴 Operating Expense Structure
Evaluation of fixed and variable expenses to identify normalization issues and risk areas likely to be scrutinized in diligence.

🔴 EBITDA Quality & Add-Back Readiness
Assessment of discretionary, non-recurring, and owner-related expenses to ensure add-backs are defensible and well-documented.

🔴 Margin & Cost Consistency
Review of departmental margins and cost trends to identify volatility that could raise buyer concerns.

🔴 Vendor & Contract Review (High-Level)
Identification of long-term contracts or above-market arrangements that may impact valuation or buyer perception.

🔴 Exit Readiness Perspective
Analysis through the lens of how a buyer, lender, or investor will interpret the financials—not how they are viewed internally.

How This Connects to the Dealer Capital Review

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.

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 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

Why Dealers Engage Us for This Work

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

Begin With Clarity

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.