BARTLEY ENGINEERING LIMITED

Executive Summary

Bartley Engineering Limited shows stable but vulnerable financial health, with improved cash reserves yet persistent short-term liquidity challenges. The company’s equity has declined, signaling a need to focus on profitability and working capital management. With targeted financial controls and cash flow monitoring, the company can strengthen its financial wellness and support sustainable growth.

BARTLEY ENGINEERING LIMITED - Analysis Report

Company Number: 12996091

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

Financial Health Assessment Report for Bartley Engineering Limited

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1. Financial Health Score: C

Explanation:
Bartley Engineering Limited shows a mixed financial condition. The company maintains a positive net asset position, but has recurring negative net current assets—indicating short-term liquidity stress. Cash reserves are healthy relative to prior years, but current liabilities exceed current assets by a small margin. The overall financial "vital signs" suggest the business is stable but vulnerable to cash flow disruptions, warranting close monitoring.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Cash at Bank	£98,062	Healthy cash balance, increased significantly from £67,487 last year, showing improved liquidity.
Current Liabilities	£99,530	Slightly higher than cash and current assets, potential short-term obligations pressure.
Net Current Assets (Working Capital)	-£1,468	Negative working capital indicates the company may struggle to cover short-term liabilities without relying on additional financing or cash inflows.
Net Assets (Shareholders’ Funds)	£668	Positive but small net worth, showing modest equity buffer. Declined from £1,249 last year, suggesting some erosion of retained earnings or reserves.
Fixed Assets (Net Book Value)	£2,638	Tangible assets present but depreciating, reflecting investment in equipment but also wear and tear.
Provisions for Liabilities	£502	Indicates some anticipated future outflows (e.g., tax, warranty, or other contingencies).

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3. Diagnosis: Financial Symptoms and Underlying Health

• Liquidity Strain: The company has a "symptom of distress" in its negative net current assets for two consecutive years. This means current liabilities slightly exceed current assets, creating a risk that day-to-day operational costs or urgent liabilities could outstrip readily available funds.

• Improving Cash Position: The significant increase in cash reserves (from £67k to £98k) is a positive sign, akin to a patient increasing hydration after dehydration. This improvement can alleviate some short-term liquidity concerns if maintained.

• Eroding Equity: The drop in net assets from £1,249 to £668 suggests the company might be incurring losses or drawing on reserves. While still positive, this contraction of equity is a warning signal that profitability or retained earnings are under pressure.

• Stable Operational Base: The company owns tangible fixed assets, evidencing ongoing investment in its engineering activities. However, depreciation expenses reduce asset values annually, requiring replacement or maintenance investment plans to stay competitive.

• Small Size and Limited Capital: With share capital of only £100 and two employees, the company operates leanly but is exposed to financial shocks that larger firms might absorb more easily.

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4. Recommendations for Financial Wellness Improvement

1. Strengthen Working Capital Management:

   • Improve collections of receivables and negotiate extended payment terms with suppliers.
   • Monitor inventory levels closely to avoid cash being tied up unnecessarily.
   • Consider short-term financing options (overdraft, invoice finance) to buffer liquidity gaps.

2. Focus on Profitability and Retained Earnings:

   • Review pricing strategies and cost controls to enhance profit margins.
   • Analyze expense lines to identify and cut non-essential costs.
   • Explore opportunities for revenue growth in core engineering activities or related services.

3. Maintain Healthy Cash Flow:

   • Prepare rolling cash flow forecasts to anticipate and manage cash needs proactively.
   • Avoid large discretionary expenditures until working capital improves.

4. Plan for Asset Maintenance and Renewal:

   • Budget for replacing or upgrading fixed assets to avoid operational disruptions.

5. Regular Financial Monitoring:

   • Establish monthly or quarterly financial reviews to detect early warning signs.
   • Engage with a financial advisor or accountant to review tax, provisions, and compliance matters.

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Medical Analogy Summary

Bartley Engineering Limited’s financial health resembles a patient with mild dehydration but stable vital signs: cash reserves have improved (hydration improved), but negative working capital signals some short-term stress (electrolyte imbalance). The equity decline is like a mild loss of body mass—manageable but requiring attention. With proper care (working capital management and profitability focus), the prognosis for recovery and growth is positive.

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