ART RESTORATION : revenue, balance sheet and financial ratios

In 2018, ART RESTORATION achieves revenue of 1.8 M€. Revenue is declining over the period 2016-2018 (CAGR: -15.1%). Significant drop of -30% vs 2017. After deducting consumption (803 k€), gross margin stands at 952 k€, i.e. a rate of 54%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 225 k€, representing 12.8% of revenue. Positive scissor effect: EBITDA margin improves by +6.4 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 172 k€, i.e. 9.8% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 34%. Debt remains under control: the company retains capacity to raise new debt if needed. Financial autonomy (= Equity / Total assets x 100) reaches 63%. 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 1.3 years of cash flow to repay all financial debt. This short period demonstrates excellent debt sustainability. Cash flow represents 10.6% of revenue. Cash flow measures resources generated by operations, available for investment and debt repayment. This high level provides strong self-financing capacity.

The liquidity ratio (= Current assets / Current liabilities) stands at 610.14. 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 1.9x. 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: 21 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 17 days. The company must finance 4 days of gap between collections and payments. Inventory turnover is 159 days (= Average inventory / Cost of goods x 360). This high level ties up cash and potentially creates obsolescence risk. Overall, WCR represents 161 days of revenue, i.e. 785 k€ to permanently finance.

Based on 159 transactions of similar company sales in 2018, the value of ART RESTORATION is estimated at 805 584 € (range 437 257€ - 1 427 776€). With an EBITDA of 225 007€, the sector multiple of 4.0x is applied. The price/revenue ratio is 0.35x (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.