GARAGE SALVADOR : revenue, balance sheet and financial ratios

In 2016, GARAGE SALVADOR achieves revenue of 581 k€. After deducting consumption (317 k€), gross margin stands at 264 k€, i.e. a rate of 45%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 30 k€, representing 5.1% of revenue. The operating margin remains fragile, requiring cost vigilance. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 11 k€, i.e. 1.8% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 69%. Debt remains under control: the company retains capacity to raise new debt if needed. Financial autonomy (= Equity / Total assets x 100) reaches 27%. The balance between equity and debt is satisfactory. Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 0.8 years of cash flow to repay all financial debt. This short period demonstrates excellent debt sustainability. Cash flow represents 4.9% of revenue. Cash flow measures resources generated by operations, available for investment and debt repayment.

The liquidity ratio (= Current assets / Current liabilities) stands at 116.04. 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 7.3x. 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: 26 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 61 days. Excellent situation: suppliers finance 35 days of the operating cycle (retail model). Inventory turnover is 9 days (= Average inventory / Cost of goods x 360). Fast turnover, sign of good inventory management. WCR is negative (-52 days): operations structurally generate cash.

Based on 1254 transactions of similar company sales (all years), the value of GARAGE SALVADOR is estimated at 129 362 € (range 65 118€ - 233 620€). With an EBITDA of 29 650€, 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.