OMEGA AUTOMOBILE : revenue, balance sheet and financial ratios

In 2020, OMEGA AUTOMOBILE achieves revenue of 179 k€. Over the period 2015-2020, the company shows strong growth with a CAGR (compound annual growth rate) of +116.7%. Significant drop of -39% vs 2019. After deducting consumption (48 k€), gross margin stands at 131 k€, i.e. a rate of 73%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 2 k€, representing 0.9% of revenue. Warning negative scissor effect: despite revenue change (-39%), EBITDA varies by -87%, reducing margin by 3.4 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 3 k€, i.e. 1.8% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 229%. Critical situation: debt significantly exceeds equity, severely limiting borrowing capacity and exposing the company to default risk. Financial autonomy (= Equity / Total assets x 100) reaches 58%. 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 14.4 years of cash flow to repay all financial debt. Beyond 7 years, banks generally consider credit risk as high. Cash flow represents 2.3% of revenue. Cash flow measures resources generated by operations, available for investment and debt repayment.

The liquidity ratio (= Current assets / Current liabilities) stands at 521.65. 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 25.2x. Operating income very largely covers interest expenses: high safety margin.

Working capital requirement (WCR) measures the cash timing gap between customer collections and supplier/inventory payments. Average customer payment term: 0 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 1 days. Favorable situation: supplier credit is longer than customer credit by 1 days. Inventory turnover is 101 days (= Average inventory / Cost of goods x 360). This high level ties up cash and potentially creates obsolescence risk. Overall, WCR represents 70 days of revenue, i.e. 35 k€ to permanently finance. Over 2015-2020, WCR increased by +2220%, requiring additional financing.

Based on 122 transactions of similar company sales in 2020, the value of OMEGA AUTOMOBILE is estimated at 8 481 € (range 4 704€ - 27 497€). With an EBITDA of 1 643€, the sector multiple of 2.0x is applied. The price/revenue ratio is 0.09x (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.