BAILEY EARTHMOVING & LOGISTICS LIMITED

Executive Summary

BAILEY EARTHMOVING & LOGISTICS LIMITED is financially sound with positive equity growth and a solid asset base, but exhibits early signs of liquidity tightness due to increased liabilities and debtor balances. Careful cash flow management and prudent debt control will be key to sustaining healthy financial vitality as the company grows.

BAILEY EARTHMOVING & LOGISTICS LIMITED - Analysis Report

Company Number: 13751118

Analysis Date: 2025-07-20 11:14 UTC

Financial Health Assessment: BAILEY EARTHMOVING & LOGISTICS LIMITED

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1. Financial Health Score: B

Explanation:
The company demonstrates solid growth and improving financial stability, reflected in increasing net assets and positive working capital. However, the presence of long-term debt and relatively modest net current assets suggest there is room for strengthening liquidity and reducing leverage. Overall, the financial "vital signs" indicate a generally healthy condition but with cautionary factors.

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2. Key Vital Signs

Metric	2024 Figure (£)	Interpretation
Current Assets	1,135,374	Comfortable level of liquid and near-liquid assets available to cover short-term obligations.
Cash on Hand	378,684	Healthy cash reserves indicating good cash flow management ("healthy cash flow pulse").
Debtors	754,229	Significant trade receivables; monitoring collection efficiency is important to prevent cash flow issues.
Current Liabilities	1,087,965	Near parity with current assets; working capital positive but tight at £47,409.
Net Current Assets (Working Capital)	47,409	Positive but slim buffer; suggests careful management of short-term obligations is needed.
Fixed Assets (Tangible)	508,737	Substantial investment in plant and machinery, indicating business growth and asset base expansion.
Long-Term Debt	295,221	Introduction of bank loans after 2023; increased financial leverage requiring monitoring.
Net Assets (Equity)	189,398	Growing equity base signals retained earnings and business value accumulation ("building financial immunity").
Profit & Loss Reserves	188,398	Reflects accumulated profits retained in the company, reinforcing net assets position.
Employee Count	3 (2024)	Small workforce consistent with micro/small company profile; lean operation.

Summary:
Current assets adequately cover liabilities with a small positive buffer, but the company should watch liquidity closely ("pulse check on cash flow"). Growth in fixed assets shows investment in operational capacity, yet the appearance of long-term debt signals increased financial strain ("symptom of leveraged financing"). Positive equity growth is a strong sign of business vitality.

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3. Diagnosis: Financial Condition Assessment

BAILEY EARTHMOVING & LOGISTICS LIMITED presents a generally stable financial profile typical of a growing small company in the specialised construction sector. The company has successfully increased its asset base, particularly in tangible fixed assets, indicating expansion of operational capability.

The "symptoms" of modest working capital and increasing bank loans suggest that while the company is investing in growth, it must remain vigilant to avoid liquidity stress. The balance between cash and debtors is good, but the sizeable debtor amount requires active management to prevent cash flow tightening.

The absence of audit (due to small company exemption) means financial controls and reporting depend heavily on internal governance, which should be robust given the company's growth trajectory.

Directors appear stable and engaged, with no reported governance or disqualification issues, which supports confidence in management's stewardship.

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4. Recommendations: Improving Financial Wellness

1. Enhance Liquidity Buffer:
   Increase cash reserves or reduce short-term liabilities to widen the working capital margin. Consider negotiating longer payment terms with suppliers or accelerating debtor collections to improve the "cash flow heartbeat."

2. Manage Debtor Risk:
   Implement stronger credit control procedures to reduce days sales outstanding. Regular debtor ageing analysis can identify potential bad debts early, avoiding liquidity "arrhythmias."

3. Prudent Debt Management:
   Monitor the impact of increased bank loans on interest expenses and cash flow. Explore refinancing options or gradual debt repayment plans to reduce financial leverage and interest burden.

4. Operational Efficiency:
   With a small workforce, ensure productivity maximisation and consider investing in staff training or technology to support sustainable growth without excessive cost increases.

5. Regular Financial Review & Forecasting:
   Establish monthly financial monitoring with cash flow forecasting to detect potential distress signs early and enable proactive management decisions.

6. Governance & Compliance:
   Maintain timely filings and compliance with Companies House to avoid penalties and safeguard company reputation.

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