ABM CONSTRUCTION : revenue, balance sheet and financial ratios

In 2017, ABM CONSTRUCTION achieves revenue of 566 k€. Significant drop of -44% vs 2016. After deducting consumption (177 k€), gross margin stands at 389 k€, i.e. a rate of 69%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 59 k€, representing 10.4% of revenue. Positive scissor effect: EBITDA margin improves by +9.8 pts, sign of improved operational efficiency. This level of operating margin is satisfactory for the sector. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 11 k€, i.e. 2.0% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 622%. 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 19%. Low autonomy: the company heavily depends on external financing (banks, suppliers). Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 2.9 years of cash flow to repay all financial debt. This short period demonstrates excellent debt sustainability. Cash flow represents 5.6% 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 123.18. 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 4.8x. 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: 78 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 84 days. Favorable situation: supplier credit is longer than customer credit by 6 days. Inventory turnover is 198 days (= Average inventory / Cost of goods x 360). This high level ties up cash and potentially creates obsolescence risk. Overall, WCR represents 48 days of revenue, i.e. 76 k€ to permanently finance.

Based on 120 transactions of similar company sales (all years), the value of ABM CONSTRUCTION is estimated at 86 126 € (range 32 191€ - 210 949€). With an EBITDA of 58 606€, the sector multiple of 1.4x is applied. The price/revenue ratio is 0.22x (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.