BDSOFT LIMITED

Executive Summary

BDSOFT LIMITED is currently experiencing financial strain characterized by negative working capital and net liabilities, indicating liquidity and solvency challenges. Immediate actions focusing on cash flow improvement, cost control, and potential capital infusion are essential to restore financial stability and support sustainable growth. Without intervention, the financial health may continue to deteriorate, risking operational viability.

BDSOFT LIMITED - Analysis Report

Company Number: 13140797

Analysis Date: 2025-07-20 16:26 UTC

Financial Health Assessment Report for BDSOFT LIMITED

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1. Financial Health Score: D (At Risk)

Explanation:
The company exhibits signs of financial distress as evidenced by negative net current assets and net liabilities in the latest fiscal year. While the company remains operational and has substantial current assets, the level of current liabilities surpasses current assets, indicating liquidity strain. Compared to the prior year, the financial position has deteriorated notably, warranting a cautious outlook.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	1,000	1,500	Minimal long-term investments; stable but low asset base.
Current Assets	174,211	11,225	Significant increase, indicating growth in liquid resources.
Current Liabilities	175,661	10,703	Sharp increase; liabilities now exceed current assets.
Net Current Assets (Working Capital)	-1,450	522	Negative working capital suggests cash flow challenges.
Total Assets Less Current Liabilities	-450	2,022	Overall net liabilities indicating solvency concerns.
Net Assets / Shareholders Funds	-450	2,022	Equity eroded; indicates losses or capital depletion.
Share Capital	10,000	10,000	Stable capital base; no new equity injections.
Employees	0	0	No employees; business likely operating on a small scale.

Interpretation of Vital Signs:

• Liquidity: The negative net current assets ("working capital") is a clear symptom of distress, indicating that short-term obligations exceed readily available assets. This can lead to difficulties in meeting day-to-day expenses ("healthy cash flow" is compromised).
• Solvency: The net liabilities position signals that liabilities have overtaken assets, reflecting an erosion of owner equity and potential solvency risk if the trend continues.
• Asset Base: Fixed assets are minimal, consistent with a micro-entity in software development, which typically relies on intellectual capital rather than heavy physical assets.
• Growth in Current Assets: The large increase in current assets may be due to receivables or cash inflows, but the matching increase in liabilities suggests funding or payment delays.
• No Staff: Absence of employees suggests a sole trader or contractor model, which can limit operational capacity but also indicates low overheads.

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3. Diagnosis

BDSOFT LIMITED is showing symptoms of financial distress, notably deteriorating liquidity and solvency indicators over the last year. The company’s working capital has flipped from positive to negative, a critical warning sign akin to a patient losing vital fluid balance. The net liabilities position implies that the company’s obligations are now exceeding its assets, undermining financial stability.

Given the company’s micro-entity status and software development industry, it likely depends heavily on project revenues or client payments. The sharp rise in current liabilities compared to current assets suggests possible delayed payments to creditors or accrued expenses outpacing collections.

The absence of employees reduces payroll pressures but may limit growth potential. The financial condition suggests the need for urgent attention to cash flow management and creditor relations to restore a healthy financial pulse.

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4. Recommendations

• Improve Cash Flow Management:
  Conduct a detailed review of receivables and payables cycles. Accelerate invoicing and collections, negotiate longer payment terms with creditors to ease liquidity pressure.

• Cost Control:
  Maintain strict control over operating expenses. Explore cost-saving measures without compromising critical business functions.

• Capital Injection or Financing:
  Consider raising additional equity or securing short-term financing to bolster working capital and stabilize the balance sheet.

• Financial Planning & Forecasting:
  Implement rolling cash flow forecasts to anticipate and manage liquidity issues proactively.

• Stakeholder Communication:
  Transparently communicate financial challenges to key stakeholders such as suppliers, clients, and investors to maintain trust and negotiate support if needed.

• Monitor Financial Metrics Regularly:
  Establish key performance indicators (KPIs) for liquidity and solvency to detect early warning signs promptly.

• Explore Growth Opportunities:
  Despite current constraints, identify potential new contracts or market niches to enhance revenue streams and rebuild financial health.

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