AUTO ACTION SERVICES : revenue, balance sheet and financial ratios

In 2018, AUTO ACTION SERVICES achieves revenue of 216 k€. Over the period 2016-2018, the company shows strong growth with a CAGR (compound annual growth rate) of +164.1%. Vs 2017, growth of +185% (76 k€ -> 216 k€). After deducting consumption (135 k€), gross margin stands at 81 k€, i.e. a rate of 37%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 22 k€, representing 10.0% of revenue. Positive scissor effect: EBITDA margin improves by +30.4 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 17 k€, i.e. 7.8% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at -320%. 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 69%. 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 0.7 years of cash flow to repay all financial debt. This short period demonstrates excellent debt sustainability. Cash flow represents 9.8% 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 76.63. 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 1.7x. 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: 16 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 38 days. Favorable situation: supplier credit is longer than customer credit by 22 days. Inventory turnover is 5 days (= Average inventory / Cost of goods x 360). Fast turnover, sign of good inventory management. WCR is negative (-67 days): operations structurally generate cash. Notable WCR improvement over the period (-4331%), freeing up cash.

Based on 159 transactions of similar company sales in 2018, the value of AUTO ACTION SERVICES is estimated at 82 411 € (range 44 607€ - 144 717€). With an EBITDA of 21 529€, 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.