BEAUTIFUL COUNTRY HOMES LTD

Executive Summary

Beautiful Country Homes Ltd demonstrates a solid financial foundation with strong net assets and positive working capital, reflecting sound business operations. However, recent significant investment in fixed assets and a substantial reduction in liquid assets signal a tightening of liquidity that requires careful cash flow management. With prudent financial oversight and working capital optimization, the company is well positioned for stable growth.

BEAUTIFUL COUNTRY HOMES LTD - Analysis Report

Company Number: 12796249

Analysis Date: 2025-07-19 12:54 UTC

Financial Health Assessment for Beautiful Country Homes Ltd

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1. Financial Health Score: B

Explanation:
Beautiful Country Homes Ltd shows solid financial footing with strong net assets and positive working capital. However, some caution arises from a significant increase in fixed assets within the latest year, and a notable decrease in current assets, which could signal liquidity pressures ahead. Overall, the company is financially sound but warrants monitoring for cash flow health.

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2. Key Vital Signs

• Net Assets / Shareholders’ Funds: £1,795,681 (2023) up from £1,521,141 (2022)
  Interpretation: Indicates a healthy equity base and growth in the company’s net worth, a key sign of financial strength.

• Fixed Assets: £1,548,717 (2023) vs £11,933 (2022)
  Interpretation: A sharp increase in fixed assets suggests recent capital investment, likely in property, plant, or equipment. This could be a sign of expansion but also ties up cash in long-term assets, reducing liquidity.

• Current Assets: £1,167,608 (2023) down from £2,685,564 (2022)
  Interpretation: A significant decrease in liquid or near-liquid assets (cash, debtors, stock) indicates reduced short-term financial flexibility and potential cash flow pressures.

• Current Liabilities: £920,644 (2023) down from £1,176,356 (2022)
  Interpretation: While current liabilities reduced, the ratio of current assets to liabilities has tightened, reducing the cushion to cover short-term obligations.

• Net Current Assets (Working Capital): £246,964 (2023) down from £1,509,208 (2022)
  Interpretation: Positive working capital remains, meaning the business can cover short-term debts, but the large drop is a symptom of tightening liquidity.

• Share Capital: £2.00
  Interpretation: Minimal share capital consistent with a micro-entity; capital base is mainly retained earnings and reserves.

• Average Employees: 2
  Interpretation: Small team size indicating a micro business operation.

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3. Diagnosis: Financial Condition Overview

Healthy Signs:

• The company has grown its net asset base, reflecting accumulated profits or capital appreciation.
• Working capital remains positive, so the company is not in immediate liquidity distress.
• The balance sheet shows no sign of insolvency or excessive leverage; creditors due within one year are covered by current assets.

Symptoms of Distress / Risk Factors:

• The sharp spike in fixed assets suggests recent investment or acquisition of property/equipment. While this is often positive for growth, it reduces liquid resources and can strain cash flow if not matched by increased revenue or financing.
• The halving of current assets is a warning sign indicating that cash or receivables have been drawn down or converted to fixed assets, reducing financial flexibility.
• Decreasing working capital, while still positive, means the business must carefully manage operational cash flow to avoid liquidity crunches.

Additional Observations:

• Directors’ loans and related-party transactions are noted, with a loan balance of £745,373 to Specialist Project Integration Ltd. This indicates reliance on related parties for financing, which can be both a support and a risk if these loans are called in or not well managed.
• The company is exempt from audit, typical for micro-entities, but this means less external financial scrutiny.

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4. Recommendations

• Enhance Cash Flow Monitoring: Implement rigorous cash flow forecasting to manage liquidity, especially given the investment in fixed assets and reduced current assets. Look for ways to accelerate debtor collections and manage creditor payment terms prudently.

• Review Capital Investment: Conduct a strategic review of fixed asset purchases to ensure they deliver expected returns and do not overly restrict working capital.

• Strengthen Working Capital Management: Explore options to optimize inventory, debtor days, and creditor terms to improve net current assets.

• Assess Related Party Loans: Formalize agreements and repayment plans for directors’ and related-party loans to ensure clarity and sustainability.

• Plan for Growth Finance: If expansion continues, consider external financing or equity to balance the capital structure and preserve liquidity.

• Maintain Compliance and Governance: As a micro-entity, maintain strong internal controls and transparency to avoid surprises and support sustainable operations.

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