Report Helps Gauge Financial Performance
The numbers are in! Fast lube industry sales in the United States increased by
4% in 2006, up from 1.6% growth as measured in 2004, according to the Automotive
Oil Change Association’s newly-released Cost of Doing Business Report.
That growth varied significantly, however, based on company sales volume. The
largest firms (over $1 million in sales) exhibited the biggest sales increase at
7.8%; the smallest firms (less than $500,000 in sales) showed an increase of 3%.
Sales for medium size firms increased the least at 0.7%.
Interestingly, geographic comparisons indicated that East Central firms realized
the strongest sales growth (13%) of any region; Western firms actually weighed
in with a sales decline of 0.1%.
The Cost of Doing Business Report was compiled by the Columbus, OH research firm
Industry Insights from the confidential 2006 year-end financial data of 72 fast
lube firms, representing 298 facilities. AOCA has been producing the Cost of
Doing Business Report biannually since 1995.
“The data in this report establishes broad yardsticks that can be used to
measure individual company performance,” said AOCA Executive Director Steve
Christie. “With this report, industry firms can compare their figures to: the
industry as a whole; firms of a comparable sales volume; firms of the same
geographic region; firms with a similar number of facilities; and the most
profitable firms. Spotting significant differences between an individual firm’s
figures and the industry comparisons can be the first step toward improving a
company’s performance.”
The report can also serve as a source of information for those thinking about
getting into the fast lube industry or for appraisal companies and lenders.
Here are a few other statistics found in this year’s Cost of Doing Business
Report:
- The typical responding firm reported a return on assets of 13.7%,
compared to 30.3% for high profit firms.
- The typical firm reported a 41.8% return on net worth, compared to a
return of 48.1% for the most profitable companies.
- High profit firms carried less debt (49.7%) relative to total assets,
compared to the typical industry firm (63.0%).
- High profit firms achieved a significantly higher net profit before tax
of 13.5%, compared to 6.8% achieved by the overall industry.
- The typical profit leading firm has been in business longer (14.5 years
vs. 10.8 years), and serviced more vehicles in 2006 (13,083 vs. 11, 328)
than did the typical responding company.
The 100+ page Cost of Doing Business Report also has valuable data on
operating expenses such as: advertising, insurance, salaries, benefits, bonuses,
commissions, payroll, rent, utilities, taxes, depreciation and amortization,
travel, uniforms, warranty, administrative, and maintenance and repairs.
To order the Cost of Doing Business Report, call AOCA at (800) 331-0329. The
cost is $80 for members and $175 for non-members.
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