BBS ENGINEERING DESIGN LTD

Executive Summary

BBS ENGINEERING DESIGN LTD is showing clear signs of financial distress, with worsening negative net assets and working capital deficits over recent years. Immediate measures to improve liquidity and capital structure are essential to stabilize the company’s financial health and secure its future viability.

BBS ENGINEERING DESIGN LTD - Analysis Report

Company Number: 13063741

Analysis Date: 2025-07-29 18:18 UTC

Financial Health Assessment for BBS ENGINEERING DESIGN LTD

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1. Financial Health Score: D

Explanation:
The company is showing clear signs of financial distress, reflected in persistent negative net assets and increasing net current liabilities over the last three years. Although it remains active and has no overdue filings, the deteriorating balance sheet indicates underlying financial health issues that require urgent attention.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Fixed Assets	1,430	Minimal investment in long-term assets; stable but low
Current Assets	5,094	Working capital resources are modest
Current Liabilities	9,278	High short-term obligations; increasing from prior years
Net Current Assets	-4,184	Negative working capital, a symptom of liquidity strain
Total Assets less Curr Liabilities	-2,754	Negative, signals overall asset coverage insufficient to cover liabilities
Net Assets / Shareholders Funds	-3,715	Negative equity, indicating accumulated losses and financial weakness

• Negative Net Current Assets ("unhealthy cash flow"): The company cannot cover short-term liabilities with current assets, a classic symptom of liquidity issues.
• Negative Net Assets ("balance sheet under stress"): The company's total liabilities exceed its total assets, indicating insolvency on paper.
• Consistent Decline: From positive net assets at incorporation in 2020 (£3,654) to deepening negative net assets in 2023 (-£3,715), showing worsening financial health.
• Micro-entity status: Limited financial complexity, but still showing clear financial distress.

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3. Diagnosis

The financial "symptoms" of BBS ENGINEERING DESIGN LTD strongly indicate the company is in a fragile financial state:

• The persistent negative working capital and net liabilities suggest liquidity challenges and potential difficulties meeting short-term obligations.
• There is no sign of recovery over the last two years; rather, the financial position worsened significantly.
• The company holds minimal fixed assets and has a very small equity base (£100 share capital) controlled entirely by the single director.
• The company is likely relying on external financing or director loans to meet obligations, which is not sustainable long-term.
• The sole director’s control over the company gives flexibility but also places responsibility on him to address these financial symptoms promptly.
• However, no overdue filings and the company remains active, showing compliance and operational continuity.

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4. Recommendations

To improve financial wellness and avoid further deterioration, the company should consider the following "treatments":

1. Liquidity Management:

   • Improve cash flow through tighter credit control and faster collection of receivables.
   • Negotiate extended payment terms with suppliers to ease current liabilities pressure.

2. Capital Injection:

   • Consider additional equity investment or director loans to restore positive net assets and working capital.

3. Cost Control:

   • Review expenses and overheads to reduce cash outflows and improve profitability.

4. Business Strategy Review:

   • Evaluate the revenue model and market opportunities to generate sustainable profits and halt the decline.

5. Financial Monitoring:

   • Implement regular financial reviews (monthly cash flow forecasts and management accounts) to detect early signs of distress.

6. Professional Advice:

   • Engage financial advisors or insolvency practitioners early to explore restructuring options if recovery is not feasible.

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Executive Summary

BBS ENGINEERING DESIGN LTD is currently experiencing financial distress, characterized by negative working capital and net liabilities that have worsened since inception. While the company remains compliant and operational, urgent action is needed to restore liquidity and solvency to avoid future insolvency risks. Strengthening cash flow management and injecting capital will be critical first steps toward financial recovery.