AUTO SERVICE DISTRIBUTION : revenue, balance sheet and financial ratios

In 2019, AUTO SERVICE DISTRIBUTION achieves revenue of 326 k€. Revenue is growing positively over 4 years (CAGR: +1.4%). Vs 2018: +3%. After deducting consumption (123 k€), gross margin stands at 203 k€, i.e. a rate of 62%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 18 k€, representing 5.6% of revenue. Warning negative scissor effect: despite revenue change (+3%), EBITDA varies by -46%, reducing margin by 5.1 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 11 k€, i.e. 3.4% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 5%. 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 86%. 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 0.5 years of cash flow to repay all financial debt. This short period demonstrates excellent debt sustainability. Cash flow represents 5.9% 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 893.47. 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: 5 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 23 days. Favorable situation: supplier credit is longer than customer credit by 18 days. Inventory turnover is 18 days (= Average inventory / Cost of goods x 360). Fast turnover, sign of good inventory management. Overall, WCR represents 44 days of revenue, i.e. 40 k€ to permanently finance. Over 2016-2019, WCR increased by +220%, requiring additional financing.

Based on 126 transactions of similar company sales in 2019, the value of AUTO SERVICE DISTRIBUTION is estimated at 26 570 € (range 15 934€ - 67 306€). With an EBITDA of 18 373€, the sector multiple of 0.7x is applied. The price/revenue ratio is 0.18x (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.