Company Financial Analysis and Goodwill Calculation

Extract

[...] The volatility of this indicator suggests difficulties in managing the balance between stable resources and the financing needs of the operating cycle. Analysis of the Income Statement The analysis of the income statement over the period 2017-2020 reveals a company facing a marked cyclical activity marked by significant fluctuations. The turnover has experienced significant variations, with a low point of 6,596 in 2018 and a rebound to 7,875 in 2019. This evolution testifies to a sensitivity to market conditions and a certain volatility in the company's activity. [...]

[...] The EBE reflects this sensitivity with marked variations, oscillating between 234 and 741 over the period. Despite these constraints, the company has improved its financial performance, transforming a loss of 47 in 2017 into a profit of 184 in 2020. This improvement in net result, despite fluctuations in activity, testifies to better operational efficiency and increased control of charges. Ratios: Debt Service Capacity : Financial Debt / CAF (Capacity for Self-Financing) 2020 = (575 + 227) / 384 = 2.08 years 2019 = (818 + 248) / 559 = 1.90 years 2018 = (1050 + 255) / -73 = -17.87 years The debt repayment capacity showed a notable improvement between 2018 and 2020. [...]

[...] The company evaluation method GOOD WILL calculated over 5 years, attention ANCC to take into account the EBE correction The calculation of Goodwill is: B - I x ANCC B = Current profit taking into account financial elements and taxation. I = Cost of own capital (if the evaluation method retained is ANCC) ANCC = Adjusted Net Current Asset Value 1. Determination of current profit This is the net result that appears in the income statement: - 2017 : -47 - 2018 : 66 - 2019 : 349 - 2020 : 184 - 2021 : 400 2. [...]

[...] This evolution puts pressure on the company's cash flow and requires particular attention in the management of the operating cycle. The Cash Flow has experienced significant fluctuations, passing from 409 in 2017 to a low of 156 in 2018, before rising to 298 in 2019 and then falling to 182 in 2020. These significant variations reflect the opposing movements of the WCR and the WCR. Although always positive, the overall decline in cash flow over the period indicates a growing tension on the company's liquidity. [...]

[...] ANCC 2021 = Equity + EBE Corrections ANCC 2021 = 2428 + 201 =2629 So the Goodwill is: 2017: -47 - (-3.20% x 1472) = 0.104 2018: 66 - (4.29% x 1535) = 0.1485 2019: 349 - (18.93% x 1842) = 0.3094 2020: 184 - ( 9.07% x 2028) = -12.7160 2021: 400 - (16.47% x 2629) = -32.9963 The Goodwill for 2021 would be -32.99 k?. This means that the value of the company's net assets corrected exceeds the current profit, which can indicate an overvaluation of the net asset in relation to the expected profitability. [...]