CHALLANS AUTOMOBILES : revenue, balance sheet and financial ratios

In 2024, CHALLANS AUTOMOBILES achieves revenue of 34.2 M€. Over the period 2016-2024, the company shows strong growth with a CAGR (compound annual growth rate) of +23.7%. Slight decline of -7% vs 2023. After deducting consumption (29.0 M€), gross margin stands at 5.2 M€, i.e. a rate of 15%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 894 k€, representing 2.6% of revenue. The operating margin remains fragile, requiring cost vigilance. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 248 k€, i.e. 0.7% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 419%. Critical situation: debt significantly exceeds equity, severely limiting borrowing capacity and exposing the company to default risk. Financial autonomy (= Equity / Total assets x 100) reaches 10%. Low autonomy: the company heavily depends on external financing (banks, suppliers). Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 10.2 years of cash flow to repay all financial debt. Beyond 7 years, banks generally consider credit risk as high. Cash flow represents 1.4% of revenue. Cash flow measures resources generated by operations, available for investment and debt repayment.

The liquidity ratio (= Current assets / Current liabilities) stands at 201.36. 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 36.7x. 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: 14 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 51 days. Excellent situation: suppliers finance 37 days of the operating cycle (retail model). Inventory turnover is 84 days (= Average inventory / Cost of goods x 360). Overall, WCR represents 88 days of revenue, i.e. 8.4 M€ to permanently finance. Over 2016-2024, WCR increased by +497%, requiring additional financing.

Based on 148 transactions of similar company sales in 2024, the value of CHALLANS AUTOMOBILES is estimated at 2 497 297 € (range 1 090 238€ - 4 390 043€). With an EBITDA of 894 023€, 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.