BMG22 IMAGE LIMITED

Executive Summary

BMG22 IMAGE LIMITED demonstrates a stable but gradually weakening financial position with sufficient working capital and positive equity. Declining cash reserves and rising receivables signal the need for improved cash flow management to prevent liquidity stress. The company remains solvent and operationally lean but should monitor financial trends closely to sustain its healthy financial pulse.

BMG22 IMAGE LIMITED - Analysis Report

Company Number: 13517595

Analysis Date: 2025-07-20 16:16 UTC

Financial Health Assessment of BMG22 IMAGE LIMITED

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1. Financial Health Score: B

Explanation:
BMG22 IMAGE LIMITED shows a generally stable financial position with positive net current assets and shareholders’ funds. However, there is a noticeable decline in cash reserves and net current assets over the last year, which signals emerging liquidity concerns. The company is small, with minimal employees and limited financial complexity, but the shrinking cash balance and declining equity indicate some early symptoms of financial strain. Overall, the company’s financial health is sound but warrants attention to cash flow management.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Cash at bank	13,850	20,191	Healthy cash flow in 2023 but declining in 2024; watch liquidity.
Debtors	3,160	0	Increase in receivables could affect cash conversion cycle.
Current Liabilities	6,165	6,118	Stable short-term obligations; manageable given assets.
Net Current Assets	10,845	14,073	Positive working capital but declining, signaling tightening liquidity.
Shareholders’ Funds	10,845	14,073	Equity remains positive but shows erosion, indicating reduced retained earnings or possible losses.
Number of Employees	1	1	Very small operation, limited fixed costs.

Interpretation:

• The company maintains a positive working capital "heartbeat," showing it can cover short-term debts with current assets.
• However, reduced cash and net current assets suggest "early symptoms" of financial stress, likely from operational cash outflows or delayed collections.
• Increasing debtors mean funds are tied up in receivables, which slows cash inflow.
• Stable current liabilities indicate no sudden increase in short-term obligations, which is positive.

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3. Diagnosis

BMG22 IMAGE LIMITED is a small private limited company operating in the business support services sector. The company is not under any distress markers such as overdue filings, director disqualifications, or insolvency proceedings.

Financially, the company shows:

• Healthy liquidity buffer but declining cash position, which could impact ability to meet obligations if the trend continues.
• Adequate working capital to fund day-to-day operations, but the reduction year-over-year suggests a need for better cash flow management.
• Positive shareholders’ funds, indicating the company is solvent and not over-leveraged, yet the reduction from £14,073 to £10,845 shows that profitability may be under pressure or dividends/withdrawals could be occurring.
• One employee (director only) indicates very lean operations with low overheads, which is good for controlling costs but also limits capacity for growth without additional staffing or investment.

Underlying health: The “symptoms” are manageable but should be monitored closely. If cash continues to decline and receivables increase, liquidity could become a “weak pulse” risking operational continuity.

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4. Recommendations

1. Improve Cash Flow Management:

   • Accelerate collection of debtor balances to convert receivables into cash faster.
   • Consider negotiating better payment terms with customers or incentivizing early payments.
   • Maintain a cash reserve to handle short-term obligations smoothly.

2. Monitor Working Capital Regularly:

   • Keep a close eye on current assets vs. liabilities to detect any liquidity crunch early.
   • Manage payables prudently to avoid late payments but optimize cash outflows.

3. Review Profitability and Costs:

   • Since equity is shrinking, review profit margins and cost control measures to ensure sustainable profitability.
   • Consider whether director remuneration or withdrawals are impacting retained earnings.

4. Strategic Planning for Growth:

   • The company has a stable foundation but limited resources due to its size. Explore options for scaling operations or diversifying income streams to strengthen financial resilience.

5. Maintain Compliance and Transparency:

   • Continue timely filing of accounts and confirmation statements to avoid penalties and maintain good standing.

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