LUVEZA AUTOMOBILES : revenue, balance sheet and financial ratios

In 2021, LUVEZA AUTOMOBILES achieves revenue of 1.0 M€. Over the period 2018-2021, the company shows strong growth with a CAGR (compound annual growth rate) of +9.5%. Vs 2020, growth of +18% (854 k€ -> 1.0 M€). After deducting consumption (815 k€), gross margin stands at 194 k€, i.e. a rate of 19%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 28 k€, representing 2.8% of revenue. Warning negative scissor effect: despite revenue change (+18%), EBITDA varies by -38%, reducing margin by 2.6 pts. This reflects costs rising faster than revenue. The operating margin remains fragile, requiring cost vigilance. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 28 k€, i.e. 2.7% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 3%. 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 77%. 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 0.1 years of cash flow to repay all financial debt. This short period demonstrates excellent debt sustainability. Cash flow represents 2.8% of revenue. Cash flow measures resources generated by operations, available for investment and debt repayment.

The liquidity ratio (= Current assets / Current liabilities) stands at 464.21. 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 0.2x. 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: 7 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 14 days. Favorable situation: supplier credit is longer than customer credit by 7 days. Inventory turnover is 34 days (= Average inventory / Cost of goods x 360). Fast turnover, sign of good inventory management. Overall, WCR represents 54 days of revenue, i.e. 152 k€ to permanently finance. Over 2018-2021, WCR increased by +124%, requiring additional financing.

Based on 128 transactions of similar company sales in 2021, the value of LUVEZA AUTOMOBILES is estimated at 86 869 € (range 41 295€ - 228 198€). With an EBITDA of 28 320€, the sector multiple of 1.8x 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.