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Margins, net profits up for area dealers in 2010

November 12, 2010

Dealers’ net profit as a percentage of sales increased to 2.1 percent this year through June, up from 1.5 percent during the same period last year, according to the August edition of Power Steering, authored by two Illinois certified public accountants.

Net profit as a percentage of gross profit plus other income stood at 14 percent for surveyed dealers through June, compared to 9.5 percent through June 2009. Also, profit margins for new-vehicle dealers are up about 50 percent for dealers through this year’s first two quarters compared to the same quarters in 2009, Friedman and Woodward reported.

The most recent year before the start of the recession showed net profit as a percentage of sales through November 2007 of 1.4 percent, and a 10 percent net profit as a percentage of gross profit plus other income.

"Total sales for 2010 are still below those in 2007," the two said, "but the profit margins in 2010 through June are well above those in 2007."

Friedman is a partner at Michael Silver & Co. in Skokie. Woodward leads Woodward & Associates in Bloomington, Ill.

 

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