ABS AUTOMOBILES : revenue, balance sheet and financial ratios

In 2015, ABS AUTOMOBILES achieves revenue of 1.4 M€. After deducting consumption (1.2 M€), gross margin stands at 156 k€, i.e. a rate of 11%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 54 k€, representing 3.8% of revenue. The operating margin remains fragile, requiring cost vigilance. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 48 k€, i.e. 3.4% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 7%. This very low level reflects a solid financial structure, offering significant room for future investments or acquisitions. Financial autonomy (= Equity / Total assets x 100) reaches 82%. This high autonomy means the company finances most of its assets through equity, a sign of strength. Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 0.2 years of cash flow to repay all financial debt. This short period demonstrates excellent debt sustainability. Cash flow represents 3.4% of revenue. Cash flow measures resources generated by operations, available for investment and debt repayment.

The liquidity ratio (= Current assets / Current liabilities) stands at 808.65. Concretely, the company has €2 of liquid assets for every €1 of short-term debt: no cash risk within 12 months. The interest coverage ratio (= EBIT / Interest expenses) is 1.6x. Coverage is limited: any activity downturn would jeopardize interest payments.

Working capital requirement (WCR) measures the cash timing gap between customer collections and supplier/inventory payments. Average customer payment term: 12 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 1 days. The company must finance 11 days of gap between collections and payments. Inventory turnover is 25 days (= Average inventory / Cost of goods x 360). Fast turnover, sign of good inventory management. Overall, WCR represents 36 days of revenue, i.e. 141 k€ to permanently finance.

Based on 1152 transactions of similar company sales (all years), the value of ABS AUTOMOBILES is estimated at 116 560 € (range 53 416€ - 311 367€). With an EBITDA of 53 660€, the sector multiple of 1.4x is applied. The price/revenue ratio is 0.14x (conservative valuation). This multiples method compares the actual sale price of similar companies to their financial indicators (Revenue, EBITDA, Net Income). It provides a market-based indicative estimate.