EURL J.E.R. PHARMA : revenue, balance sheet and financial ratios

In 2022, EURL J.E.R. PHARMA achieves revenue of 1.5 M€. Over the period 2015-2022, the company shows strong growth with a CAGR (compound annual growth rate) of +7.2%. Slight decline of -4% vs 2021. After deducting consumption (1.1 M€), gross margin stands at 464 k€, i.e. a rate of 30%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 156 k€, representing 10.1% of revenue. Warning negative scissor effect: despite revenue change (-4%), EBITDA varies by -43%, reducing margin by 6.8 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 125 k€, i.e. 8.1% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 118%. Debt level is high: negotiating margin with banks is reduced. Financial autonomy (= Equity / Total assets x 100) reaches 41%. This high autonomy means the company finances most of its assets through equity, a sign of strength. Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 7.5 years of cash flow to repay all financial debt. Beyond 7 years, banks generally consider credit risk as high. Cash flow represents 7.0% 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 163.58. 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 8.5x. 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: 3 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 47 days. Excellent situation: suppliers finance 44 days of the operating cycle (retail model). Inventory turnover is 41 days (= Average inventory / Cost of goods x 360). Fast turnover, sign of good inventory management. Overall, WCR represents 51 days of revenue, i.e. 219 k€ to permanently finance.

Based on 215 transactions of similar company sales in 2022, the value of EURL J.E.R. PHARMA is estimated at 1 397 918 € (range 1 042 727€ - 2 007 979€). With an EBITDA of 155 897€, the sector multiple of 9.3x is applied. The price/revenue ratio is 0.81x (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.