RENOV MONTAGNE SARL : revenue, balance sheet and financial ratios

In 2019, RENOV MONTAGNE SARL achieves revenue of 148 k€. Activity remains stable over the period (CAGR: -1.6%). Vs 2018: +3%. After deducting consumption (85 k€), gross margin stands at 63 k€, i.e. a rate of 42%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 18 k€, representing 12.4% of revenue. This level of operating margin is satisfactory for the sector. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 3 k€, i.e. 1.9% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 364%. 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 63%. 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 7.3 years of cash flow to repay all financial debt. Beyond 7 years, banks generally consider credit risk as high. Cash flow represents 10.8% 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 202.58. 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 9.5x. 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: 9 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 80 days. Excellent situation: suppliers finance 71 days of the operating cycle (retail model). Inventory turnover is 173 days (= Average inventory / Cost of goods x 360). This high level ties up cash and potentially creates obsolescence risk. Overall, WCR represents 103 days of revenue, i.e. 42 k€ to permanently finance. Over 2016-2019, WCR increased by +190%, requiring additional financing.

Based on 113 transactions of similar company sales (all years), the value of RENOV MONTAGNE SARL is estimated at 39 910 € (range 16 548€ - 70 181€). With an EBITDA of 18 433€, the sector multiple of 3.6x is applied. The price/revenue ratio is 0.11x (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.