BA2 CONSULTANCY LTD
Company number 08183169 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Credit Analysis: BA2 Consultancy Ltd
1. Credit Opinion: CONDITIONAL
Reasoning: BA2 Consultancy Ltd demonstrates adequate payment capability supported by a strong liquidity position and consistent profitability. However, the conditional rating reflects significant volatility in historical financial performance, the micro-scale of the operation (2 employees), and key-person risk inherent in a husband-and-wife directorship structure. The business has proven resilient over its 13-year history, recovering from near-insolvency in 2017, but the erratic trajectory of net assets warrants caution and appropriate covenant protection.
A moderate credit facility would be supportable, but exposure should be capped relative to the company's modest asset base and cash generation capacity.
2. Financial Strength
Balance Sheet Summary (YE 31 August 2025):
| Metric | 2025 | 2024 | Movement |
|---|---|---|---|
| Net Assets | £37,778 | £31,905 | +18.4% |
| Cash | £57,898 | £40,166 | +44.2% |
| Net Current Assets | £37,550 | £31,594 | +18.8% |
| Shareholders' Funds | £37,778 | £31,905 | +18.4% |
Key Observations:
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Asset Composition: The business is asset-light, with cash representing 83.6% of total assets (£57,898 of £69,173). Tangible fixed assets are negligible at £288 net — typical for a professional services firm but offering limited collateral value.
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Equity Position: Shareholders' funds of £37,778 against called-up share capital of just £100 demonstrates accumulated retained profits of £37,678. This represents a gradual rebuild from the near-insolvency position in 2017 (net assets of £1).
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Historical Volatility: Net assets have shown significant swings:
- 2017: £1 (effectively insolvent)
- 2019: £10,354
- 2021: £59,756 (peak)
- 2022: £26,238 (sharp decline)
- 2025: £37,778
This volatility suggests earnings are lumpy or subject to significant working capital movements, likely driven by project-based revenue typical of quantity surveying practices.
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Liability Profile: No long-term debt is visible. Current liabilities of £31,623 comprise corporation tax (£13,631), other taxation/social security (£5,913), and other creditors (£12,079). Trade creditors reduced to nil from £2,756, suggesting the company is not stretching supplier terms.
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Gearing: With no borrowings, the company is ungeared. This provides headroom for debt accommodation if required.
3. Cash Flow Assessment
Liquidity Position:
| Ratio | 2025 | 2024 |
|---|---|---|
| Current Ratio | 2.19x | 2.42x |
| Cash to Current Liabilities | 1.83x | 1.80x |
| Net Current Assets to Total Assets | 54.3% | 58.7% |
Analysis:
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Strong Liquidity: The current ratio of 2.19x indicates comfortable coverage of short-term obligations. More critically, the cash-to-current-liabilities ratio of 1.83x means the company could settle all current liabilities from cash reserves alone, without needing to realise trade debtors.
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Profitability Indicators: While no P&L is filed (small company exemption), profitability can be inferred:
- P&L reserve increased by £5,873 (from £31,805 to £37,678) after accounting for the £96 depreciation charge
- Corporation tax liability of £13,631 (up from £8,495) suggests pre-tax profits in the range of £54,000-£68,000 depending on timing differences
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This represents a meaningful improvement on the prior year
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Working Capital Dynamics:
- Trade debtors decreased from £13,678 to £11,275 — may indicate lower revenue or improved collections
- Other creditors increased from £4,781 to £12,079 — this warrants clarification as it could represent accrued director remuneration, deferred income, or other obligations
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The net working capital position remains healthy at £37,550
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Cash Generation: Cash increased by £17,732 year-on-year despite a corporation tax liability increase of £5,136, demonstrating genuine cash generation rather than accounting-driven profit.
Concern: The increase in "other creditors" from £4,781 to £12,079 represents a 152% increase and should be understood. If this represents accrued director loan repayments or deferred income, it could impact future cash availability.
4. Monitoring Points
| Priority | Metric | Rationale | Threshold for Concern |
|---|---|---|---|
| High | Net Assets Trend | Historical volatility indicates risk of sharp deterioration | Decline below £25,000 |
| High | Cash Position | Primary source of liquidity and repayment capacity | Cash falling below £25,000 or below current liabilities |
| Medium | Other Creditors | Unexplained significant increase; could signal cash pressure if director-related | Further significant increases without clear explanation |
| Medium | Corporation Tax Liability | Proxy for profitability; sharp declines signal revenue pressure | Reduction of >30% year-on-year |
| Medium | Trade Debtors | If increasing significantly, may indicate collection issues or revenue concentration | Debtors exceeding 25% of total assets |
| Low | Filing Compliance | Currently good; late filing can signal management distraction | Any overdue filings |
| Low | Director Changes | Husband-and-wife structure creates key-person risk | Resignation or appointment of new officers |
Additional Considerations:
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Key-Person Risk: The business relies entirely on two related directors. Any health, relationship, or capacity issues affecting either director could materially impact operations and debt service capability.
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Industry Exposure: Quantity surveying is cyclical and linked to construction activity. Economic downturns affecting the UK construction sector could reduce revenue pipelines significantly.
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Related Party Transactions: Given the family ownership structure, monitor for director loan accounts, above-market remuneration, or asset withdrawals that could erode the equity base.
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Revenue Concentration: As a micro-entity, the business is vulnerable to loss of key clients. Understanding the client diversification would strengthen the credit assessment.