BARGAIN WASTE DISPOSAL LIMITED

Executive Summary

Bargain Waste Disposal Limited is a small private waste management company with improving but still minimal net assets and persistent negative working capital. The company’s liquidity remains constrained due to high current liabilities and low cash balances, with significant reliance on hire purchase debt. Conditional approval is recommended, contingent on improved cash flow management and ongoing debt reduction to ensure sustainable credit risk.

BARGAIN WASTE DISPOSAL LIMITED - Analysis Report

Company Number: 12873306

Analysis Date: 2025-07-29 20:50 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Bargain Waste Disposal Limited demonstrates ongoing operations with modest net assets and a consistent negative working capital position. The company’s financial structure relies heavily on hire purchase debt, which has decreased during the last year, indicating some debt reduction efforts. However, persistent net current liabilities and low cash balances suggest tight liquidity and potential short-term repayment stress. Approval is possible if the borrower provides assurances on improving cash flow management and reduction of short-term liabilities, as well as evidence of stable or growing revenue streams and customer payments.

2. Financial Strength:
   The company’s net assets have improved slightly from £94 in 2023 to £1,553 in 2024, supported by retained earnings growth. Tangible fixed assets represent a significant portion of total assets (£39,546), mostly motor vehicles and equipment, which support business operations but are financed substantially through hire purchase agreements (£32,592 total borrowings). The balance sheet shows a high gearing level with liabilities exceeding current assets by £8,257, and a sizeable portion of debt falling due after one year (£23,533). This structure indicates moderate financial risk, with limited equity buffer to absorb shocks.

3. Cash Flow Assessment:
   The cash at bank is low (£892), and trade debtors increased substantially (£18,901), suggesting that much working capital is tied up in receivables. The high current liabilities (£28,050) exceed current assets (£19,793), placing pressure on liquidity. The company must carefully manage debtor collections and control creditor payments to maintain operational liquidity. The hire purchase repayments add to cash outflows, and reliance on such financing should be monitored closely. There is no indication of cash flow volatility but the tight liquidity position warrants cautious credit extension.

4. Monitoring Points:

• Debtor ageing and collection efficiency to ensure receivables are realised timely.
• Cash flow trends and liquidity ratios to assess short-term repayment capability.
• Progress in reducing hire purchase and other borrowings to improve leverage.
• Profitability and turnover growth to confirm business viability and capacity to build reserves.
• Director’s management actions on working capital optimization and cost control.