BEVERLY HOMES LTD

Executive Summary

Beverly Homes Ltd shows solid growth in fixed assets and positive equity, indicating ongoing investment and value creation. However, the emergence of negative working capital and increased borrowing signals liquidity stress and greater financial risk. Proactive cash flow management and careful debt monitoring are essential to maintain financial wellness as the company grows.

BEVERLY HOMES LTD - Analysis Report

Company Number: 13803628

Analysis Date: 2025-07-29 19:53 UTC

Financial Health Assessment of Beverly Homes Ltd

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1. Financial Health Score: C

Explanation:
Beverly Homes Ltd shows moderate financial stability with positive net assets and increasing fixed assets, reflecting investment in long-term assets. However, the company is exhibiting symptoms of liquidity stress as current liabilities exceed current assets in 2024, indicating potential short-term cash flow challenges. Overall, the financial condition is stable but carries cautionary signals requiring proactive management.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	507,904	248,370	Healthy growth in long-term assets, possibly property or equipment, indicating capital investment.
Current Assets	18,469	28,828	Decrease in liquid and short-term assets; less cash and receivables available for immediate use.
Current Liabilities	19,214	14,047	Short-term debts have increased slightly, adding pressure on liquidity.
Net Current Assets (Working Capital)	-745	14,781	Negative working capital in 2024 shows symptoms of short-term financial strain ("cash flow distress").
Creditors Due After One Year	457,679	242,718	Long-term liabilities have nearly doubled, increasing financial leverage and risk exposure.
Net Assets (Shareholders’ Funds)	49,480	20,433	Positive and growing equity base, indicating retained profits or capital injection over time.
Employees	1	1	Very small scale operation, which may affect operational flexibility and risk tolerance.

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3. Diagnosis

Underlying Business Health:
Beverly Homes Ltd operates in the real estate sector, focusing on letting and buying/selling properties. The significant increase in fixed assets from £248k to £508k in 2024 suggests acquisition or development of property assets, consistent with its industry. However, the working capital has turned negative, which is a symptom of potential liquidity issues. This could mean the company may struggle to meet short-term obligations if cash inflows do not improve.

The doubling of long-term creditors indicates increased borrowing or financial leverage, which raises the company's financial risk, especially if property values or rental income are volatile.

Positive net assets and shareholders’ funds growth show the company is building value, but the financial structure is becoming more leveraged. The small employee base suggests limited operational scale and possibly high dependency on the director or small team.

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4. Recommendations

• Improve Liquidity Management:
  Address the negative working capital by accelerating receivables collection, controlling payables, or increasing short-term cash reserves to ensure healthy cash flow. Consider negotiating extended payment terms with creditors if possible.

• Monitor Debt Levels:
  The company’s increased long-term liabilities should be carefully monitored. Ensure that debt servicing costs are manageable and that borrowing is aligned with the company’s cash flow and asset growth.

• Capital Injection or Profit Retention:
  To strengthen shareholders’ funds and reduce reliance on debt, consider injecting additional equity or retaining more profits.

• Operational Efficiency:
  With only one employee, ensure that operational risks are managed by possibly expanding team capacity or outsourcing critical functions to avoid bottlenecks.

• Financial Planning and Forecasting:
  Develop a robust financial forecast to anticipate liquidity needs and plan asset acquisitions to avoid overextending financially.

• Risk Mitigation:
  Given the company's real estate focus, monitor market conditions closely to manage risks related to property valuation and rental income stability.

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