BIG MIKE LOGISTICS LTD

Executive Summary

BIG MIKE LOGISTICS LTD exhibits a stable and improving financial position with strong liquidity and growing equity, characteristic of a healthy micro-entity in early growth. The company benefits from director support and prudent management but should maintain vigilance on cash flow and operational capacity to sustain growth. With continued financial discipline and strategic planning, the outlook remains positive.

BIG MIKE LOGISTICS LTD - Analysis Report

Company Number: 13136353

Analysis Date: 2025-07-29 14:18 UTC

Financial Health Assessment for BIG MIKE LOGISTICS LTD

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1. Financial Health Score: B

Explanation:
BIG MIKE LOGISTICS LTD demonstrates a solid and improving financial position typical of a young micro-entity with steady growth in net assets and working capital. The company maintains positive net current assets and shareholders’ funds, indicating financial stability. However, limited revenue disclosure and a very small scale of operations with only one employee signal a need for cautious optimism. The absence of audit and limited complexity due to micro-entity status limits deeper insight, but no signs of distress are visible.

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2. Key Vital Signs:

Metric	2024 Value	Interpretation
Current Assets	£30,186	Healthy increase from prior years; good liquidity.
Current Liabilities	£14,897	Increased but manageable given assets; short-term debts.
Net Current Assets	£15,289	Positive working capital; company can cover short-term obligations comfortably.
Net Assets (Shareholders' Funds)	£14,689	Growth from £4,497 in 2023 to £14,689 in 2024; capital base strengthening.
Share Capital	£1.00	Nominal share capital typical of micro companies.
Director's Loan	£8,824	Director has loaned funds interest-free; indicates internal funding support.
Average Number of Employees	1	Very small workforce; company likely reliant on key personnel.

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3. Diagnosis: Business Financial Health

Symptoms Analysis:

• The company has shown a significant increase in current assets from £5,551 to £30,186 in the last financial year, a positive sign of improved liquidity and asset base.
• Current liabilities have also increased but remain well covered by current assets, resulting in a healthy net current asset position (£15,289). This reflects good short-term financial health and ability to meet obligations, suggesting a "healthy cash flow" environment.
• The boost in net assets and shareholders’ funds from £4,497 to £14,689 indicates either retained profits or further capital injections, which strengthens the company’s equity foundation — a "strengthened immune system" against financial shocks.
• The director’s unpaid loan of £8,824 acts as a financial buffer or "internal lifeline," providing liquidity without interest cost, thus reducing external financing dependence.
• The drop in average employees from 3 to 1 may suggest operational streamlining or scaling back, which could be a strategic response to market conditions or cost control.
• Absence of an audit (permitted under micro-entity rules) means financial scrutiny is limited; however, the accounts are prepared under recognized standards (FRS 105), lending credibility.
• No overdue filings or compliance issues indicate good "corporate hygiene" and management discipline.

Overall, the company shows no symptoms of financial distress such as negative working capital, accumulated losses, or excessive liabilities. The financial condition is stable and improving, indicating a "healthy patient" in early growth phase.

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4. Recommendations:

• Maintain Liquidity Vigilance: Continue monitoring cash flow closely as rapid growth in current assets may include receivables or stock that could become stressed. A healthy cash flow cycle is essential to avoid liquidity crunches.
• Formalize Director Loans: Consider documenting director loans with formal agreements including repayment terms to ensure transparent balance sheet presentation and reduce any ambiguity for external stakeholders.
• Operational Scaling: Evaluate staffing needs carefully; a reduction in employees might risk operational capacity or lead to over-reliance on key individuals. Plan for sustainable growth with appropriate human resource support.
• Prepare for Audit Thresholds: As the company grows, it may soon exceed micro-entity thresholds; prepare for more detailed accounting and possible audit requirements to maintain compliance and investor confidence.
• Strategic Planning: Develop longer-term financial forecasting and budgeting to anticipate capital needs and manage working capital effectively. This will improve resilience and enable proactive management of potential risks.
• Explore Capital Injection: Depending on growth ambitions, consider increasing share capital or external financing to diversify funding sources and reduce dependence on director loans.

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