PHARMACIE NOTRE DAME : revenue, balance sheet and financial ratios

In 2016, PHARMACIE NOTRE DAME achieves revenue of 1.7 M€. Revenue is declining over the period 2013-2016 (CAGR: -13.5%). Significant drop of -12% vs 2015. After deducting consumption (1.0 M€), gross margin stands at 608 k€, i.e. a rate of 37%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 272 k€, representing 16.5% of revenue. Positive scissor effect: EBITDA margin improves by +2.2 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 80 k€, i.e. 4.9% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 91%. Debt level is high: negotiating margin with banks is reduced. Financial autonomy (= Equity / Total assets x 100) reaches 39%. The balance between equity and debt is satisfactory. Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 12.7 years of cash flow to repay all financial debt. Beyond 7 years, banks generally consider credit risk as high. Cash flow represents 5.5% 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 104.60. 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 23.5x. 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: 36 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 154 days. Excellent situation: suppliers finance 118 days of the operating cycle (retail model). Inventory turnover is 127 days (= Average inventory / Cost of goods x 360). This high level ties up cash and potentially creates obsolescence risk. Overall, WCR represents 168 days of revenue, i.e. 769 k€ to permanently finance. Over 2013-2016, WCR increased by +164%, requiring additional financing.

Based on 1804 transactions of similar company sales (all years), the value of PHARMACIE NOTRE DAME is estimated at 1 773 515 € (range 1 271 295€ - 2 538 909€). With an EBITDA of 272 027€, the sector multiple of 8.9x is applied. The price/revenue ratio is 0.72x (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.