BETTERING OUR WORLDS (BOW) LTD

Executive Summary

BETTERING OUR WORLDS (BOW) LTD is currently in a financially weak position with negative net assets and working capital pressure, despite some operational growth. Conditional credit approval is recommended, contingent on stringent liquidity monitoring and management of long-term liabilities. Ongoing oversight of financial and operational performance will be essential to ensure repayment capability and business sustainability.

BETTERING OUR WORLDS (BOW) LTD - Analysis Report

Company Number: 12516316

Analysis Date: 2025-07-20 14:09 UTC

1. Credit Opinion:
   CONDITIONAL APPROVAL. BETTERING OUR WORLDS (BOW) LTD is an active micro-entity engaged in software development, showing a mixed financial position. The company’s net assets have deteriorated significantly from positive levels in prior years to a net liability position at the last reporting date (£129k negative net assets). This raises concerns about solvency and going concern, despite current liability management efforts. The company has a relatively high level of long-term creditors (£240k) which may constrain liquidity. However, the increase in employee count from 7 to 10 suggests some operational growth. Approval is recommended subject to close monitoring of liquidity, covenant compliance, and timely receipt of updated financials.

2. Financial Strength:
   The latest accounts show fixed assets of £133k and current assets of £94k against current liabilities of £163k, producing negative net current assets of £22k. More critically, the company carries £240k in creditors due after more than one year, resulting in total net liabilities of £129k. This reversal from net positive shareholders’ funds in earlier years indicates financial strain and potential erosion of capital base. The negative equity position suggests the company may be relying on creditor financing or delayed payments, which weakens its balance sheet resilience.

3. Cash Flow Assessment:
   The negative net current assets position implies working capital pressure, with current liabilities exceeding current assets by £22k. Although prepayments and accrued income increased notably (£46k versus £3.6k prior year), this may not be immediately liquid. The significant long-term creditor balance also suggests deferred obligations that could impact future cash flow. Liquidity is therefore constrained, and the company’s ability to service short-term obligations may depend on successful cash management and ongoing support from major shareholders or creditors.

4. Monitoring Points:

• Monitor quarterly cash flow and working capital trends to detect any liquidity deterioration.
• Watch for changes in creditor terms, especially the £240k long-term liabilities, and assess any refinancing or repayment plans.
• Review future accounts to confirm whether negative equity persists or is addressed through capital injection or profitability improvement.
• Track operational metrics including employee growth and any contract wins as indicators of business momentum and revenue generation.
• Observe management composition changes and their impact on strategic decisions and financial stewardship.