BLACK FLAG ENGINEERING : revenue, balance sheet and financial ratios

In 2021, BLACK FLAG ENGINEERING achieves revenue of 22 k€. Revenue is declining over the period 2017-2021 (CAGR: -34.5%). Significant drop of -79% vs 2020. After deducting consumption (12 k€), gross margin stands at 11 k€, i.e. a rate of 48%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 10 k€, representing 43.0% of revenue. Positive scissor effect: EBITDA margin improves by +12.1 pts, sign of improved operational efficiency. This high EBITDA margin provides strong self-financing capacity and resilience to uncertainties. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 4 k€, i.e. 18.0% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 56%. Debt remains under control: the company retains capacity to raise new debt if needed. Financial autonomy (= Equity / Total assets x 100) reaches 33%. The balance between equity and debt is satisfactory. Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 4.6 years of cash flow to repay all financial debt. This ratio remains within usual banking standards. Cash flow represents 43.2% 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 657.16. 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 3.2x. 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: 11 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 27 days. Favorable situation: supplier credit is longer than customer credit by 16 days. Inventory turnover is 783 days (= Average inventory / Cost of goods x 360). This high level ties up cash and potentially creates obsolescence risk. Overall, WCR represents 1077 days of revenue, i.e. 67 k€ to permanently finance. Over 2017-2021, WCR increased by +132%, requiring additional financing.

Based on 128 transactions of similar company sales in 2021, the value of BLACK FLAG ENGINEERING is estimated at 11 892 € (range 5 230€ - 46 368€). With an EBITDA of 9 622€, the sector multiple of 1.8x 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.