LYS : revenue, balance sheet and financial ratios

In 2018, LYS achieves revenue of 101 k€. Revenue is growing positively over 3 years (CAGR: +3.8%). Slight decline of -2% vs 2017. After deducting consumption (51 k€), gross margin stands at 50 k€, i.e. a rate of 50%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 2 k€, representing 2.3% of revenue. Warning negative scissor effect: despite revenue change (-2%), EBITDA varies by -60%, reducing margin by 3.3 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 686 €, i.e. 0.7% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 593%. 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 8%. Low autonomy: the company heavily depends on external financing (banks, suppliers). Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 24.7 years of cash flow to repay all financial debt. Beyond 7 years, banks generally consider credit risk as high. Cash flow represents 1.4% of revenue. Cash flow measures resources generated by operations, available for investment and debt repayment.

The liquidity ratio (= Current assets / Current liabilities) stands at 129.60. 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 21.6x. 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: 0 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 102 days. Excellent situation: suppliers finance 102 days of the operating cycle (retail model). Inventory turnover is 79 days (= Average inventory / Cost of goods x 360). Overall, WCR represents 75 days of revenue, i.e. 21 k€ to permanently finance. Over 2016-2018, WCR increased by +57%, requiring additional financing.

Based on 132 transactions of similar company sales (all years), the value of LYS is estimated at 14 786 € (range 8 892€ - 27 638€). With an EBITDA of 2 302€, the sector multiple of 3.2x 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.