INDUSTRIAL CUTTING : revenue, balance sheet and financial ratios

In 2024, INDUSTRIAL CUTTING achieves revenue of 3.4 M€. Revenue is growing positively over 3 years (CAGR: +4.6%). Vs 2023, growth of +55% (2.2 M€ -> 3.4 M€). After deducting consumption (1.1 M€), gross margin stands at 2.3 M€, i.e. a rate of 68%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 141 k€, representing 4.1% of revenue. Positive scissor effect: EBITDA margin improves by +9.6 pts, sign of improved operational efficiency. The operating margin remains fragile, requiring cost vigilance. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 41 k€, i.e. 1.2% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 942%. 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 5%. Low autonomy: the company heavily depends on external financing (banks, suppliers). Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 24.5 years of cash flow to repay all financial debt. Beyond 7 years, banks generally consider credit risk as high. Cash flow represents 1.5% of revenue. Cash flow measures resources generated by operations, available for investment and debt repayment.

The liquidity ratio (= Current assets / Current liabilities) stands at 207.64. 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 38.7x. 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: 103 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 63 days. The gap of 40 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 74 days (= Average inventory / Cost of goods x 360). Overall, WCR represents 147 days of revenue, i.e. 1.4 M€ to permanently finance. Over 2022-2024, WCR increased by +134%, requiring additional financing.

Based on 101 transactions of similar company sales (all years), the value of INDUSTRIAL CUTTING is estimated at 445 263 € (range 172 698€ - 818 119€). With an EBITDA of 140 907€, the sector multiple of 2.5x is applied. The price/revenue ratio is 0.24x (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.