GARAGE LAMARGOT : revenue, balance sheet and financial ratios

In 2018, GARAGE LAMARGOT achieves revenue of 305 k€. Over the period 2016-2018, the company shows strong growth with a CAGR (compound annual growth rate) of +6.8%. Significant drop of -42% vs 2017. After deducting consumption (171 k€), gross margin stands at 134 k€, i.e. a rate of 44%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 4 k€, representing 1.3% of revenue. Warning negative scissor effect: despite revenue change (-42%), EBITDA varies by -90%, reducing margin by 6.3 pts. This reflects costs rising faster than revenue. The operating margin remains fragile, requiring cost vigilance. Net income is negative at -2 k€ (-0.6% of revenue), which will impact equity.

The debt ratio (= Financial debt / Equity x 100) stands at 18%. 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 49%. 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 3.2 years of cash flow to repay all financial debt. This ratio remains within usual banking standards. Cash flow represents 1.1% of revenue. Cash flow measures resources generated by operations, available for investment and debt repayment.

The liquidity ratio (= Current assets / Current liabilities) stands at 158.43. 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 10.3x. 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: 21 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 46 days. Favorable situation: supplier credit is longer than customer credit by 25 days. Inventory turnover is 28 days (= Average inventory / Cost of goods x 360). Fast turnover, sign of good inventory management. Overall, WCR represents 43 days of revenue, i.e. 36 k€ to permanently finance. Over 2016-2018, WCR increased by +79%, requiring additional financing.

Based on 120 transactions of similar company sales in 2018, the value of GARAGE LAMARGOT is estimated at 21 778 € (range 11 631€ - 48 656€). With an EBITDA of 4 027€, 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.