VERN AUTO SERVICES : revenue, balance sheet and financial ratios

In 2024, VERN AUTO SERVICES achieves revenue of 734 k€. Revenue is growing positively over 3 years (CAGR: +2.1%). Vs 2017, growth of +10% (667 k€ -> 734 k€). After deducting consumption (315 k€), gross margin stands at 419 k€, i.e. a rate of 57%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 30 k€, representing 4.1% of revenue. The operating margin remains fragile, requiring cost vigilance. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 11 k€, i.e. 1.5% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 98%. Debt level is high: negotiating margin with banks is reduced. Financial autonomy (= Equity / Total assets x 100) reaches 38%. The balance between equity and debt is satisfactory. Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 10.5 years of cash flow to repay all financial debt. Beyond 7 years, banks generally consider credit risk as high. Cash flow represents 2.2% of revenue. Cash flow measures resources generated by operations, available for investment and debt repayment.

The liquidity ratio (= Current assets / Current liabilities) stands at 154.63. 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 6.4x. 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: 37 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 42 days. Favorable situation: supplier credit is longer than customer credit by 5 days. Inventory turnover is 13 days (= Average inventory / Cost of goods x 360). Fast turnover, sign of good inventory management. Overall, WCR represents 53 days of revenue, i.e. 107 k€ to permanently finance. Over 2016-2024, WCR increased by +99%, requiring additional financing.

Based on 147 transactions of similar company sales in 2024, the value of VERN AUTO SERVICES is estimated at 168 495 € (range 85 496€ - 299 339€). With an EBITDA of 29 750€, the sector multiple of 5.5x 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.