AXEL AUTO INTERNATIONAL : revenue, balance sheet and financial ratios

In 2018, AXEL AUTO INTERNATIONAL achieves revenue of 554 k€. Activity remains stable over the period (CAGR: -3.9%). Significant drop of -28% vs 2017. After deducting consumption (0 €), gross margin stands at 554 k€, i.e. a rate of 100%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 74 k€, representing 13.3% of revenue. Warning negative scissor effect: despite revenue change (-28%), EBITDA varies by -42%, reducing margin by 3.3 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 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 43%. Debt remains under control: the company retains capacity to raise new debt if needed. Financial autonomy (= Equity / Total assets x 100) reaches 20%. The balance between equity and debt is satisfactory. Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 4.7 years of cash flow to repay all financial debt. This ratio remains within usual banking standards. Cash flow represents 6.1% 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 98.44. 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 14.6x. Operating income very largely covers interest expenses: high safety margin.

Working capital requirement (WCR) measures the cash timing gap between customer collections and supplier/inventory payments. Average customer payment term: 425 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 358 days. The gap of 67 days means the company finances its customers for over a month before being paid relative to supplier payments. This weighs on cash flow. Overall, WCR represents 558 days of revenue, i.e. 858 k€ to permanently finance. Over 2016-2018, WCR increased by +59%, requiring additional financing.

Based on 120 transactions of similar company sales in 2018, the value of AXEL AUTO INTERNATIONAL is estimated at 88 516 € (range 28 285€ - 214 872€). With an EBITDA of 73 556€, the sector multiple of 1.6x is applied. The price/revenue ratio is 0.16x (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.