MD MOTORS : revenue, balance sheet and financial ratios

In 2018, MD MOTORS achieves revenue of 149 k€. Over the period 2016-2018, the company shows strong growth with a CAGR (compound annual growth rate) of +38.8%. Vs 2017, growth of +52% (98 k€ -> 149 k€). After deducting consumption (54 k€), gross margin stands at 95 k€, i.e. a rate of 64%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 13 k€, representing 8.8% of revenue. Positive scissor effect: EBITDA margin improves by +4.3 pts, sign of improved operational efficiency. This level of operating margin is satisfactory for the sector. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 7 k€, i.e. 4.7% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 404%. 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 57%. 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 0.6 years of cash flow to repay all financial debt. This short period demonstrates excellent debt sustainability. Cash flow represents 7.8% of revenue. Cash flow measures resources generated by operations, available for investment and debt repayment. Satisfactory level allowing partial financing of growth.

The liquidity ratio (= Current assets / Current liabilities) stands at 82.31. 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 4.1x. Financial charges are adequately covered by operations.

Working capital requirement (WCR) measures the cash timing gap between customer collections and supplier/inventory payments. Average customer payment term: 95 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 51 days. The gap of 44 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 14 days (= Average inventory / Cost of goods x 360). Fast turnover, sign of good inventory management. WCR is negative (-97 days): operations structurally generate cash. Notable WCR improvement over the period (-4292%), freeing up cash.

Based on 159 transactions of similar company sales in 2018, the value of MD MOTORS is estimated at 48 811 € (range 27 106€ - 82 541€). With an EBITDA of 13 146€, 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.