Company Number: 13952726

Analysis Date: 2025-07-20 14:57 UTC

Financial Health Assessment of Bertoli Brothers Ltd (Year Ending 31 March 2024)

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1. Financial Health Score: D

Explanation:
The company exhibits signs of financial distress, with persistent negative net assets and net current liabilities over multiple years. The score reflects concerns regarding liquidity and solvency, indicating the company is currently not in a financially healthy position.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	155,630	Stable investment in long-term assets
Current Assets	6,861	Very low short-term assets to cover immediate debts
Current Liabilities	60,365	High short-term obligations compared to current assets
Net Current Assets (Working Capital)	-53,504	Negative working capital; warning sign of liquidity stress
Total Assets Less Current Liabilities	102,126	Indicates positive long-term asset base
Creditors Due After One Year	112,930	High long-term liabilities
Net Assets (Shareholders’ Funds)	-11,404	Negative equity, indicating liabilities exceed assets
Staff Numbers	2	Small workforce, typical of micro-entity

Interpretation of Vital Signs:

• Liquidity (Cash Flow Health): The company’s current assets are insufficient to cover its short-term debts, reflected by a negative net current asset position. This is a symptom of cash flow stress, akin to a patient with low blood pressure struggling to circulate oxygen efficiently.
• Solvency (Balance Sheet Strength): Net assets are negative, meaning total liabilities exceed total assets. This suggests the company is effectively "underwater," a serious symptom indicating potential insolvency risk.
• Asset Base: Fixed assets remain stable, showing that the company has invested in long-term resources, which can be a positive if properly managed and generating income.
• Liabilities: The presence of significant long-term creditors (over £110k) adds pressure on future financial health, as these obligations will need servicing or refinancing.

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3. Diagnosis

Bertoli Brothers Ltd is currently exhibiting symptoms consistent with financial distress. The negative working capital and shareholders’ funds indicate the company is struggling to meet its short-term obligations and has an equity deficit. Despite owning fixed assets valued at £155,630, the company’s liabilities surpass its total assets, signaling a balance sheet weakness.

The consistent negative net asset position over the past three years suggests that this is not a recent development but a chronic issue. The company operates in the management and letting of real estate sector, which can be capital intensive and require steady rental income or fees to support liabilities. However, given the small size (micro-entity) and minimal workforce, the business may face challenges in scaling revenue to cover debts.

Without corrective action, the company risks worsening liquidity problems, potentially leading to insolvency proceedings or forced asset sales under distress conditions.

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4. Recommendations

To improve financial wellness and stabilize the company’s financial health, consider the following actions:

• Improve Liquidity:

  • Accelerate collection of any receivables and negotiate extended payment terms with creditors to ease short-term cash flow pressures.
  • Consider injecting additional capital or obtaining short-term financing to cover immediate liabilities and avoid default.

• Restructure Debt:

  • Engage with creditors holding long-term debt (£112,930) to explore refinancing, rescheduling, or partial debt forgiveness to reduce financial burden.

• Asset Utilization:

  • Evaluate the fixed assets for potential to generate additional income or consider selling non-core assets to improve cash reserves.

• Cost Management:

  • Review operational expenses to identify potential savings, especially given the small staff size; ensure expenses are aligned with revenue generation capability.

• Strategic Growth:

  • Develop a clear business plan to increase rental income or management fees, leveraging real estate holdings effectively.

• Regular Monitoring:

  • Implement monthly cash flow forecasts and financial reviews to detect early warning signs and adjust strategies proactively.

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Executive Summary

Bertoli Brothers Ltd is currently facing financial distress, marked by negative net assets and insufficient current assets to cover short-term liabilities. The company shows chronic liquidity and solvency issues typical of a patient struggling with low vital signs, requiring urgent intervention. To improve financial health, management should focus on enhancing liquidity, restructuring debt, and optimizing asset utilization while carefully managing costs.