BMG SYSTEMS LTD

Executive Summary

BMG SYSTEMS LTD shows a robust and improving financial condition, marked by strong liquidity and growing equity despite its micro-entity scale. The company exhibits healthy operational cash flow and sound solvency, positioning it well for controlled growth. Continued focus on cash management and strategic scaling will enhance its financial wellness and business resilience.

BMG SYSTEMS LTD - Analysis Report

Company Number: SC680671

Analysis Date: 2025-07-20 13:32 UTC

Financial Health Assessment for BMG SYSTEMS LTD

---

1. Financial Health Score: B+

Explanation:
BMG SYSTEMS LTD demonstrates a solid and improving financial position characteristic of a young micro-entity. The company has shown remarkable growth in net current assets and net assets over the last year, indicating strengthening liquidity and overall financial stability. While still small and with modest fixed assets, the company exhibits a "healthy cash flow" symptom and good working capital management. However, given its micro size and limited operational scale, there's room to enhance resilience and profitability further.

---

2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Fixed Assets	3,822	Small investment in long-term assets, typical for a micro-entity in construction installation.
Current Assets	27,963	Significant increase from prior year, reflects strong short-term asset base (cash, receivables).
Current Liabilities	11,215	Moderate short-term obligations; manageable relative to current assets.
Net Current Assets	16,748	Strong positive working capital, a vital sign of liquidity health and operational flexibility.
Total Net Assets (Equity)	20,570	Equity has grown substantially, indicating retained earnings/profits or capital injection.
Share Capital	10	Nominal share capital, typical for micro-entities; most equity is retained earnings.
Employees	1	Small workforce, consistent with micro company status.
Account Category	Micro	Minimal regulatory burden but limited scale and growth potential.

---

3. Diagnosis

• Liquidity & Working Capital:
  The company shows a very "healthy cash flow" symptom with net current assets increasing from £1,798 in 2022 to £16,748 in 2023. This suggests the business can comfortably cover short-term debts and has improved operational cash management.

• Asset Management:
  Fixed assets have slightly decreased, but this is not alarming given the nature of the business. The focus likely remains on service and installation rather than heavy capital investment.

• Equity & Solvency:
  Equity has increased from £2,619 to £20,570, indicating retained profits or fresh injections of capital, enhancing the company's solvency and buffer against financial stress.

• Growth Trajectory:
  The large jump in current assets, particularly receivables or cash equivalents, suggests successful business development or improved contract collections.

• Size & Scale:
  With only one employee and micro-entity status, growth and diversification potential is limited. The company is in a stable but early stage of development.

• Risk Factors:
  No signs of overdue filings or director disqualifications. The small size means dependency on key individuals (directors), which could be a vulnerability.

---

4. Recommendations

• Maintain Strong Cash Flow Controls:
  Continue rigorous management of receivables and payables to preserve liquidity. Monitor debtor aging closely to avoid potential cash flow "symptoms of distress."

• Consider Gradual Asset Investment:
  Evaluate opportunities to invest in tools, equipment, or technology that could improve service efficiency without overextending finances.

• Plan for Growth Scaling:
  With strong financial footing, consider strategic hires or partnerships to expand capacity and market reach, diversifying revenue sources.

• Build Financial Reserves:
  Aim to build retained earnings as a buffer against industry fluctuations or unexpected expenses, enhancing financial resilience.

• Regular Financial Reviews:
  Implement quarterly financial health checks to catch any early warning signs of distress, akin to routine health screenings.

• Compliance Vigilance:
  Maintain timely filing of accounts and returns to avoid penalties and reputational damage.

---