LG-SERVICES : revenue, balance sheet and financial ratios

In 2023, LG-SERVICES achieves revenue of 107 k€. Revenue is declining over the period 2016-2023 (CAGR: -29.0%). Significant drop of -74% vs 2021. After deducting consumption (0 €), gross margin stands at 107 k€, i.e. a rate of 100%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 109 k€, representing 101.6% of revenue. Positive scissor effect: EBITDA margin improves by +211.6 pts, sign of improved operational efficiency. This high EBITDA margin provides strong self-financing capacity and resilience to uncertainties. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 14 k€, i.e. 13.5% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at -116%. 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 -470%. Low autonomy: the company heavily depends on external financing (banks, suppliers). Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 54.6 years of cash flow to repay all financial debt. Beyond 7 years, banks generally consider credit risk as high. Cash flow represents 13.5% 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 397.89. 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 88.7x. 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: 360 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 0 days. The gap of 360 days means the company finances its customers for over a month before being paid relative to supplier payments. This weighs on cash flow. Overall, WCR represents 337 days of revenue, i.e. 100 k€ to permanently finance. Notable WCR improvement over the period (-89%), freeing up cash.

Based on 100 transactions of similar company sales (all years), the value of LG-SERVICES is estimated at 332 940 € (range 161 930€ - 515 623€). With an EBITDA of 108 841€, the sector multiple of 5.6x is applied. The price/revenue ratio is 0.53x (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.