fincheck@trezy.io
80%

Fincheck by Trezy Limited

Operational performance

87%
Financial health

73%
Future outlook

79%

Company Valuation

€290K

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Fincheck by Trezy Limited

Looking good

According to the analysis, this business appears to be in good financial health. Check below to see more details about the analysis and stay on top by using Trezy to better monitor & forecast financial performance.

Company Strengths

The company has very strong revenue growth, gaining market share rapidly. It has no financial debt or leverage.

Company Weaknesses

Profit margins are below industry averages, indicating potential issues with cost control or pricing. Negative working capital may cause liquidity issues in the future if revenue declines or costs increase.

Key considerations

The things to consider when working for, selling to, investing in and buying from this company.
When buying from
  • No major red flags for buying from this company based on the financial data provided
When selling to
  • No major red flags for selling to this company based on the financial data provided
When investing in
  • The company has positive revenue growth and profitability but low cash flow which could indicate potential liquidity issues
When working for
  • The company appears financially stable currently but has a high percentage of salaries to revenue which could indicate potential issues with being able to maintain payroll if revenue declines
Positives
  • Positive 18.98% revenue growth rate
  • 71.71% gross profit margin rate
  • Positive net profit
Negatives
  • Low cash flow with only 2.21% EBITDA margin rate
  • High 44.96% salaries to revenue ratio
  • Negative working capital

Management style of the business owner

Insight into their leadership approach and decision-making strategies through the analysis of their annual accounts

Growth orientation

3/5
  • Based on the high 18.98% revenue growth rate and 71.71% gross margin, this company seems to have an aggressive growth-focused strategy. However, with only 2.21% EBITDA margin and 1.79% net margin, profits are quite low compared to revenue, suggesting potential overexpansion.

Financial conservatism

4/5
  • The financial debt levels are quite low at only 11.8% of total assets. The company also has ample cash reserves to cover short-term liabilities. This indicates a reasonably financially conservative approach.

Cost control

2/5
  • With operating expenses making up 99.5% of revenue, cost control does not seem to be a priority. However, the company is running very lean working capital with no inventory or accounts receivable. This suggests some focus on efficiency but much room for improvement on managing overhead expenses.

Overall risk profile

3/5
  • The high revenue growth rate paired with low profit margins and high operating costs signal an aggressive growth strategy with some execution risks. However, the financial position remains reasonably stable. Overall risk profile is moderately high.

Operational performance

Looking good
87%
Operational performance is crucial for businesses, as it directly influences efficiency, costs, and customer satisfaction, driving sustainable growth and profitability.

Revenue growth

5/5
  • The company had a revenue growth rate of 18.98% in 2019, which is a very good level of growth compared to similar companies. This indicates the company is expanding its operations and gaining market share.

Profit margin

3/5
  • The net profit margin was 1.79% in 2019. This is a relatively low margin, indicating that operating costs and expenses are high compared to revenue generated.

Cost control

2/5
  • With salaries and social charges making up 44.96% of revenue in 2019, the cost structure seems quite high. More efficiency in operations and human resource spending could improve margins.

Financial health

Looking good
73%
Insight into their leadership approach and decision-making strategies through the analysis of their annual accounts.

Liquidity analysis

3/5
  • The company had €10,238 in cash at the end of 2019. However, with negative working capital of €26,178, liquidity appears constrained.

Debt management

4/5
  • Financial debts were €21,785 at the end of 2019, representing 11.8% of total assets. The debt level seems reasonable given the company's size.

Working capital trends

2/5
  • The negative working capital of €26,178 indicates potential issues in managing inventory, receivables and payables. Tighter control of working capital could improve liquidity.

Future outlook

Looking good
79%
It’s important when evaluating a business to understand what its future could look like. It’s crucial for making informed decisions and planning strategies. It helps anticipate potential challenges & identify growth opportunities.

Capital investment

4/5
  • With fixed assets of €84,818 and solid revenue growth, the company seems to be investing adequately in operations.

Equity position

4/5
  • Equity was at a reasonable 32.3% of total assets in 2019. Maintaining this equity cushion provides stability amidst business fluctuations.

Leverage and solvency

4/5
  • The financial debts to EBITDA ratio was 1.97 in 2019, indicating the company can service its debts through operating cash flows.

Average Company Valuation

€290K

This is estimated based on the annual statement analysed. Below you can find other methods used to measure the potential value of this company.
Discounted cash flow €296K
  • Estimated future cash flows of 300,000 EUR per year for 5 years, discounted at a rate of 5% per year. Results in a valuation of 295,634 EUR.
Multiples valuation €250K
  • Used a revenue multiple of 5x based on industry averages to value the company. With 2019 revenue of 499,890 EUR, the estimated valuation is 249,945 EUR.
Economic return invested capital €304K
  • Calculated ROIC of 15% based on 2019 operating income of 12,778 EUR and estimated invested capital of 85,000 EUR. Applied a growth rate of 5% for 5 years along with a 12% discount rate.
Liquidation value €84.8K
  • Estimated liquidation value based on 2019 fixed assets value of 84,818 EUR, assuming a liquidation sale value of 100% of fixed assets.
Earnings capitalization €217K
  • Capitalized 2019 net income of 8,955 EUR at an expected growth rate of 15% for 5 years and a capitalization rate of 20%.
Real options €350K
  • Estimated strategic value of international expansion and new product development options at 350,000 EUR based on projected cash flows and risks.

Likelihood of bankruptcy

Based on the annual statements provided, how likely is this company to be bankrupt in the next 1, 3 and 5 years.

1 year

20%

3 years

30%

5 years

40%

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