VERGNE FRERES : revenue, balance sheet and financial ratios

In 2019, VERGNE FRERES achieves revenue of 3.9 M€. Over the period 2016-2019, the company shows strong growth with a CAGR (compound annual growth rate) of +25.2%. Vs 2018, growth of +65% (2.3 M€ -> 3.9 M€). After deducting consumption (916 k€), gross margin stands at 2.9 M€, i.e. a rate of 76%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 330 k€, representing 8.5% of revenue. Warning negative scissor effect: despite revenue change (+65%), EBITDA varies by -93%, reducing margin by 193.8 pts. This reflects costs rising faster than revenue. This level of operating margin is satisfactory for the sector. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 213 k€, i.e. 5.5% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at -342%. 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 -28%. Low autonomy: the company heavily depends on external financing (banks, suppliers). Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 14.8 years of cash flow to repay all financial debt. Beyond 7 years, banks generally consider credit risk as high. Cash flow represents 7.2% 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 371.22. 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 15.7x. 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: 42 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 50 days. Favorable situation: supplier credit is longer than customer credit by 8 days. Inventory turnover is 152 days (= Average inventory / Cost of goods x 360). This high level ties up cash and potentially creates obsolescence risk. Overall, WCR represents 170 days of revenue, i.e. 1.8 M€ to permanently finance.

Based on 95 transactions of similar company sales (all years), the value of VERGNE FRERES is estimated at 484 344 € (range 181 553€ - 2 181 372€). With an EBITDA of 330 118€, the sector multiple of 1.4x is applied. The price/revenue ratio is 0.17x (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.
Medium reliability: estimate to be confirmed with in-depth analysis.