BEECHWAY LTD

Executive Summary

Beechway Ltd demonstrates solid financial health with positive working capital, growing equity, and strong cash reserves, indicating stable and well-managed operations typical for a small quantity surveying firm. The company is financially sound with no immediate risks, but should continue to monitor cash flow and tax obligations carefully to sustain its healthy position. With prudent management, the company’s outlook remains positive.

BEECHWAY LTD - Analysis Report

Company Number: 13667314

Analysis Date: 2025-07-20 18:34 UTC

Financial Health Assessment of BEECHWAY LTD (As of 31 October 2024)

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1. Financial Health Score: B+

Explanation:
Beechway Ltd shows solid financial footing with positive net assets and improving net current assets over the last four years. The company exhibits healthy working capital management and consistent growth in shareholders’ funds. The absence of external audit and relatively modest asset base, typical for a small private company, slightly tempers the score. However, the financial statements reveal no distress signals, indicating a well-managed small business with stable financial "vital signs."

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2. Key Vital Signs:

Metric	2024 Value	Interpretation
Current Assets	£28,385	Adequate liquidity, primarily held in cash (£17,477) and debtors (£10,908).
Current Liabilities	£15,819	Short-term obligations manageable relative to current assets.
Net Current Assets (Working Capital)	£12,566	Positive working capital indicates “healthy cash flow” and ability to cover short-term debts.
Net Assets	£13,257	Positive net assets reflect overall financial stability and residual value after liabilities.
Shareholders’ Funds	£13,257	Equity growth over the years signals retained profits and sound financial management.
Cash Position	£17,477	Strong cash reserves provide a cushion against unforeseen expenses and operational needs.
Employee Count	2	Small team size aligns with the company’s micro/small category, limiting overhead risk.
Fixed Assets (Tangible)	£691	Low fixed asset base consistent with a service-oriented business (quantity surveying).
Creditors Composition	Mainly tax & social security (£14,459) and lease obligations (£444)	Timely liabilities; tax figure suggests active compliance but requires monitoring for cash flow impact.

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3. Diagnosis:

Beechway Ltd’s financial “vital signs” indicate a company in good health:

• Liquidity & Working Capital: The company maintains positive net current assets (£12,566), demonstrating it can comfortably meet short-term obligations. This is akin to a patient with a strong pulse and stable blood pressure — no immediate liquidity crises.

• Profit Retention & Equity Growth: Shareholders' funds have increased steadily from £9,281 in 2021 to £13,257 in 2024, suggesting profitable operations and prudent reinvestment of earnings. This reflects a “healthy heart” pumping retained earnings back into the business.

• Debt & Obligations: Current liabilities have increased but remain well covered by current assets. The bulk of liabilities are tax and social security, which are obligations that must be met regularly. The company shows no signs of over-leverage or distress in creditor management.

• Asset Base: The company’s fixed assets are minimal, which is typical for a quantity surveying firm that relies more on expertise than heavy equipment. This implies low capital expenditure demands and flexibility.

• Size & Category: As a small private limited company with two employees, the company’s financial profile is consistent with its scale and industry. The director holds full control, supporting streamlined decision-making.

• Audit Exemption: The company benefits from audit exemption under UK law for small companies, which reduces compliance costs but also means financials are unaudited, requiring reliance on internal accuracy.

No symptoms of financial distress such as negative working capital, losses, or covenant breaches are observed. The company appears stable with a positive prognosis if current management and market conditions persist.

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4. Recommendations:

To maintain and improve financial wellness, the following steps are advised:

• Cash Flow Monitoring: Continue rigorous monitoring of cash flow, especially considering the significant tax and social security liabilities. Maintain a buffer to avoid short-term liquidity shocks.

• Debtor Management: While debtors have increased, ensure timely collection to prevent cash flow strain. Consider credit control policies if overdue debts arise.

• Tax Planning: Engage in proactive tax planning to optimize liabilities and avoid surprises that may impact working capital.

• Growth Investment: Explore opportunities to reinvest part of retained earnings in business development or technology that can enhance service delivery and competitive positioning.

• Contingency Planning: Prepare for economic uncertainties with contingency reserves or access to short-term financing lines to safeguard against unexpected downturns.

• Governance and Compliance: Even though audit exemption applies, maintain high standards of internal controls and financial record-keeping to ensure compliance and accuracy.

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