VERSAILLES CHANGE : revenue, balance sheet and financial ratios

In 2017, VERSAILLES CHANGE achieves revenue of 1.7 M€. Revenue is declining over the period 2015-2017 (CAGR: -5.8%). Significant drop of -12% vs 2016. After deducting consumption (1.5 M€), gross margin stands at 212 k€, i.e. a rate of 12%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 85 k€, representing 4.9% of revenue. Warning negative scissor effect: despite revenue change (-12%), EBITDA varies by -60%, reducing margin by 5.9 pts. This reflects costs rising faster than revenue. The operating margin remains fragile, requiring cost vigilance. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 60 k€, i.e. 3.5% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 51%. Debt remains under control: the company retains capacity to raise new debt if needed. Financial autonomy (= Equity / Total assets x 100) reaches 59%. 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 1.1 years of cash flow to repay all financial debt. This short period demonstrates excellent debt sustainability. Cash flow represents 3.5% of revenue. Cash flow measures resources generated by operations, available for investment and debt repayment.

The liquidity ratio (= Current assets / Current liabilities) stands at 1053.36. 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 0.0x. Danger: operating income does not cover interest charges, unsustainable situation.

Working capital requirement (WCR) measures the cash timing gap between customer collections and supplier/inventory payments. Average customer payment term: 0 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 1 days. Favorable situation: supplier credit is longer than customer credit by 1 days. Inventory turnover is 14 days (= Average inventory / Cost of goods x 360). Fast turnover, sign of good inventory management. Overall, WCR represents 20 days of revenue, i.e. 96 k€ to permanently finance. Notable WCR improvement over the period (-50%), freeing up cash.

Based on 103 transactions of similar company sales (all years), the value of VERSAILLES CHANGE is estimated at 306 211 € (range 146 873€ - 753 033€). With an EBITDA of 84 625€, the sector multiple of 2.5x is applied. The price/revenue ratio is 0.30x (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.