HAPPY LOVE : revenue, balance sheet and financial ratios

In 2023, HAPPY LOVE achieves revenue of 2.5 M€. Over the period 2016-2023, the company shows strong growth with a CAGR (compound annual growth rate) of +6.1%. Vs 2021: +8%. After deducting consumption (1.9 M€), gross margin stands at 572 k€, i.e. a rate of 23%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 26 k€, representing 1.0% of revenue. Warning negative scissor effect: despite revenue change (+8%), EBITDA varies by -68%, reducing margin by 2.4 pts. This reflects costs rising faster than revenue. The operating margin remains fragile, requiring cost vigilance. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 8 k€, i.e. 0.3% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 0%. 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 51%. 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 0.1 years of cash flow to repay all financial debt. This short period demonstrates excellent debt sustainability. Cash flow represents 0.5% of revenue. Cash flow measures resources generated by operations, available for investment and debt repayment.

The liquidity ratio (= Current assets / Current liabilities) stands at 91.65. 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 0.7x. Danger: operating income does not cover interest charges, unsustainable situation.

Working capital requirement (WCR) measures the cash timing gap between customer collections and supplier/inventory payments. Average customer payment term: 4 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 45 days. Excellent situation: suppliers finance 41 days of the operating cycle (retail model). Inventory turnover is 33 days (= Average inventory / Cost of goods x 360). Fast turnover, sign of good inventory management. Overall, WCR represents 33 days of revenue, i.e. 225 k€ to permanently finance.

Based on 124 transactions of similar company sales (all years), the value of HAPPY LOVE is estimated at 163 270 € (range 79 835€ - 440 722€). With an EBITDA of 25 679€, the sector multiple of 2.4x is applied. The price/revenue ratio is 0.17x (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.