EREL AGENCEMENT MENUISERIE : revenue, balance sheet and financial ratios

In 2021, EREL AGENCEMENT MENUISERIE achieves revenue of 313 k€. Significant drop of -14% vs 2020. After deducting consumption (44 k€), gross margin stands at 269 k€, i.e. a rate of 86%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 27 k€, representing 8.7% of revenue. Warning negative scissor effect: despite revenue change (-14%), EBITDA varies by -46%, reducing margin by 5.0 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 12 k€, i.e. 3.9% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 243%. 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 24%. The balance between equity and debt is satisfactory. Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 7.7 years of cash flow to repay all financial debt. Beyond 7 years, banks generally consider credit risk as high. Cash flow represents 5.7% 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 280.04. 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 11.5x. 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: 70 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 32 days. The gap of 38 days means the company finances its customers for over a month before being paid relative to supplier payments. This weighs on cash flow. Inventory turnover is 3 days (= Average inventory / Cost of goods x 360). Fast turnover, sign of good inventory management. Overall, WCR represents 60 days of revenue, i.e. 52 k€ to permanently finance.

Based on 264 transactions of similar company sales (all years), the value of EREL AGENCEMENT MENUISERIE is estimated at 52 450 € (range 21 007€ - 96 297€). With an EBITDA of 27 264€, the sector multiple of 2.1x 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.