COVERITY : revenue, balance sheet and financial ratios

In 2024, COVERITY achieves revenue of 9.8 M€. Over the period 2016-2024, the company shows strong growth with a CAGR (compound annual growth rate) of +120.4%. Significant drop of -16% vs 2023. After deducting consumption (0 €), gross margin stands at 9.8 M€, i.e. a rate of 100%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 797 k€, representing 8.2% of revenue. Warning negative scissor effect: despite revenue change (-16%), EBITDA varies by -71%, reducing margin by 15.7 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 255 k€, i.e. 2.6% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at -136%. 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 -48%. Low autonomy: the company heavily depends on external financing (banks, suppliers). Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 18.9 years of cash flow to repay all financial debt. Beyond 7 years, banks generally consider credit risk as high. Cash flow represents 1.8% of revenue. Cash flow measures resources generated by operations, available for investment and debt repayment.

The liquidity ratio (= Current assets / Current liabilities) stands at 141.26. 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 27.7x. 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: 107 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 74 days. The gap of 33 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 117 days of revenue, i.e. 3.2 M€ to permanently finance. Over 2016-2024, WCR increased by +13510%, requiring additional financing.

Based on 193 transactions of similar company sales (all years), the value of COVERITY is estimated at 3 460 451 € (range 975 014€ - 8 279 959€). With an EBITDA of 797 456€, the sector multiple of 1.2x is applied. The price/revenue ratio is 0.98x (in line with sector norms). 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.