A VOS RENOV' : revenue, balance sheet and financial ratios

In 2016, A VOS RENOV' achieves revenue of 65 k€. Vs 2015, growth of +87% (35 k€ -> 65 k€). After deducting consumption (53 k€), gross margin stands at 12 k€, i.e. a rate of 19%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 6 k€, representing 9.0% of revenue. Warning negative scissor effect: despite revenue change (+87%), EBITDA varies by +30%, reducing margin by 4.0 pts. This reflects costs rising faster than revenue. This level of operating margin is satisfactory for the sector. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 716 €, i.e. 1.1% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 231%. 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 7%. Low autonomy: the company heavily depends on external financing (banks, suppliers). Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 3.7 years of cash flow to repay all financial debt. This ratio remains within usual banking standards. Cash flow represents 6.6% of revenue. Cash flow measures resources generated by operations, available for investment and debt repayment. Satisfactory level allowing partial financing of growth.

The liquidity ratio (= Current assets / Current liabilities) stands at 121.15. 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 2.4x. Financial charges are adequately covered by operations.

Working capital requirement (WCR) measures the cash timing gap between customer collections and supplier/inventory payments. Average customer payment term: 294 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 180 days. The gap of 114 days means the company finances its customers for over a month before being paid relative to supplier payments. This weighs on cash flow. Inventory turnover is 20 days (= Average inventory / Cost of goods x 360). Fast turnover, sign of good inventory management. Overall, WCR represents 186 days of revenue, i.e. 34 k€ to permanently finance.

Based on 302 transactions of similar company sales (all years), the value of A VOS RENOV' is estimated at 9 072 € (range 4 469€ - 17 279€). With an EBITDA of 5 896€, the sector multiple of 1.6x is applied. The price/revenue ratio is 0.20x (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.