GARAGE DES ARENES : revenue, balance sheet and financial ratios

In 2016, GARAGE DES ARENES achieves revenue of 502 k€. Revenue is growing positively over 3 years (CAGR: +1.9%). Slight decline of -2% vs 2015. After deducting consumption (203 k€), gross margin stands at 299 k€, i.e. a rate of 59%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 57 k€, representing 11.3% of revenue. Positive scissor effect: EBITDA margin improves by +8.9 pts, sign of improved operational efficiency. This level of operating margin is satisfactory for the sector. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 51 k€, i.e. 10.2% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 7%. 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 4%. Low autonomy: the company heavily depends on external financing (banks, suppliers). Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 0.2 years of cash flow to repay all financial debt. This short period demonstrates excellent debt sustainability. Cash flow represents 11.2% 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 287.31. 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 0.9x. Danger: operating income does not cover interest charges, unsustainable situation.

Working capital requirement (WCR) measures the cash timing gap between customer collections and supplier/inventory payments. Average customer payment term: 35 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 31 days. The company must finance 4 days of gap between collections and payments. Inventory turnover is 70 days (= Average inventory / Cost of goods x 360). Overall, WCR represents 87 days of revenue, i.e. 122 k€ to permanently finance. Over 2014-2016, WCR increased by +37%, requiring additional financing.

Based on 1254 transactions of similar company sales (all years), the value of GARAGE DES ARENES is estimated at 211 767 € (range 100 397€ - 395 901€). With an EBITDA of 56 554€, the sector multiple of 4.0x is applied. The price/revenue ratio is 0.35x (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.