ASHLEY BALE IT SERVICES LTD

Executive Summary

ASHLEY BALE IT SERVICES LTD maintains a positive liquidity position but shows concerning declines in cash reserves and net assets over recent years, suggesting operational challenges. To sustain financial health, the company should enhance financial transparency, control costs, and seek growth opportunities. Prompt action will help reverse the current downward trend and secure long-term stability.

ASHLEY BALE IT SERVICES LTD - Analysis Report

Company Number: 13441841

Analysis Date: 2025-07-20 16:19 UTC

Financial Health Assessment for ASHLEY BALE IT SERVICES LTD

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1. Financial Health Score: B-

• Explanation: The company shows solid liquidity with positive working capital and a clean balance sheet, but a noticeable decline in cash reserves and total net assets over the past year signals caution. The absence of a profit and loss statement limits insight into profitability and cash flow generation. Overall, the firm is financially stable but exhibits early symptoms of financial stress that require attention.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Cash at Bank	£16,199	Healthy cash flow previously (£44,926 in 2021), but a steady decline over 3 years raises concern.
Current Assets	£16,972	Mostly cash, indicating liquidity but limited diversification of assets.
Current Liabilities	£1,207	Low short-term debt, manageable and well-covered by current assets.
Net Current Assets	£15,765	Positive working capital, indicating short-term obligations are comfortably covered.
Shareholders Funds	£15,765	Equity remains positive but has halved since 2021 (£30,739), indicating erosion of retained earnings.
Debtors	£773	Low receivables, which reduces risk of bad debts but also suggests limited credit sales.
Share Capital	£1.00	Minimal share capital, typical for small private companies.
Employee Count	1	Single-employee operation, suggesting limited operational scale.

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3. Diagnosis: What the Financial Data Reveals About Business Health

• Liquidity Status: The company retains a "healthy cash flow" symptom, with cash and current assets exceeding current liabilities by a comfortable margin. This indicates the business can meet its short-term commitments without distress.

• Declining Asset Base: The "symptom of distress" is the halving of net assets and cash reserves from 2021 to 2024, which may point to reduced profitability, increased expenses, or investment in non-current assets not reflected here. This decline could be a warning signal of operational challenges or lower revenue generation.

• Limited Operational Scale: The business operates with a single employee (likely the director) and minimal share capital, implying a small-scale service operation with limited financial buffer.

• Lack of Profit & Loss Data: The absence of an income statement in the filings restricts evaluation of profitability trends, operating margins, and cost management, which are critical to a full financial health diagnosis.

• Director Advances: The director's balance owed to the company has reduced significantly, indicating some repayment or financial restructuring at director level.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Increase Transparency: File complete accounts including profit and loss statements in future filings to provide a clearer picture of profitability and operational efficiency.

• Cash Flow Management: Investigate the causes behind the decline in cash reserves and net assets. Implement tighter cash flow forecasting and controls to avoid liquidity squeeze.

• Cost Control: Review operating expenses closely to identify areas for cost reduction, especially given the small scale of operations.

• Revenue Growth: Explore opportunities to increase sales or diversify service offerings to rebuild equity and improve working capital.

• Capital Structure: Consider increasing share capital or seeking external investment to strengthen the balance sheet and provide a buffer against unforeseen expenses.

• Financial Planning: Develop a financial plan that includes budgeting, forecasting, and risk assessments to proactively manage financial health.

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Medical Analogy Summary:
The company's financial "vital signs" show a pulse that is steady but weakening, with "healthy cash flow" currently supporting operations but "symptoms of distress" in the shrinking net assets signaling the need for prompt intervention. Without addressing these early warning signs, the financial health could deteriorate, akin to a patient with stable but declining vital signs requiring lifestyle adjustments and monitoring.

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