BMS LANDSCAPING & PAVING LTD

Executive Summary

BMS Landscaping & Paving Ltd is financially stable with positive equity growth and controlled liabilities, typical of a micro-entity in its initial years. Liquidity is adequate but with a narrow working capital margin, suggesting the need for improved cash flow management. With prudent financial practices and strategic growth, the company is well-positioned for a healthy future.

BMS LANDSCAPING & PAVING LTD - Analysis Report

Company Number: 13160509

Analysis Date: 2025-07-20 15:31 UTC

Financial Health Assessment for BMS LANDSCAPING & PAVING LTD

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1. Financial Health Score: B

Explanation:
BMS Landscaping & Paving Ltd demonstrates generally stable financial health typical of a micro-entity in its early years. The company shows positive net assets, moderate working capital, and steady shareholder funds growth. However, there are signs of cautious liquidity management and a slight reduction in current assets that warrant monitoring. The absence of detailed profit and loss data limits full diagnostics but overall, the company is financially sound with room for strengthening its cash flow and operational reserves.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Fixed Assets	44,893	Represents investment in long-term resources; steady growth from £19,818 in 2021 to £44,893.
Current Assets	15,582	Liquid assets for short-term needs; decreased from 21,385 in 2023, indicating tighter liquidity.
Current Liabilities	15,167	Short-term debts; slightly reduced from previous year, reflecting better short-term debt control.
Net Current Assets (Working Capital)	1,713	Positive but low working capital; suggests limited buffer for day-to-day operations.
Creditors (Long-term liabilities)	15,167	Long-term debts have decreased, easing financial burden.
Net Assets (Equity)	31,039	Positive and growing shareholder funds indicate retained earnings and company value building.
Share Capital	1	Minimal share capital, typical for micro-entities.
Average Number of Employees	1	Small operational scale consistent with micro status.

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3. Diagnosis: Financial Health Overview

• Liquidity & Cash Flow: The company displays a "healthy but cautious" cash flow scenario. Current assets cover current liabilities, albeit with a small net working capital cushion (£1,713). This signals that while immediate obligations can be met, the company should monitor cash closely to avoid liquidity stress, especially given the decrease in current assets from the prior year.

• Solvency & Capital Structure: The net assets of £31,039 and a corresponding shareholders’ fund indicate that the company is solvent and building equity steadily. Decreasing long-term liabilities improve solvency and reduce financial risk.

• Asset Management: Growth in fixed assets suggests ongoing investment in operational capacity (equipment, machinery), reflecting business expansion or enhancement. However, fixed assets should be managed efficiently to avoid over-investment that could strain cash reserves.

• Operational Scale & Risk: With just one employee (likely the director), operational risk is concentrated but manageable. The company’s micro status implies limited complexity but also limited diversification and scale.

• Governance & Control: Full ownership and control by a single director (Mr Perry Alan Niven) facilitates agile decision-making but highlights dependency on one individual for business continuity and strategic direction.

• Compliance: No overdue filings or accounts, which reflects good governance and compliance discipline.

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4. Recommendations: Enhancing Financial Wellness

• Improve Working Capital Buffer: Aim to increase current assets or reduce current liabilities to build a stronger working capital cushion. This can be through tighter credit control, managing payables, or maintaining higher cash reserves to buffer short-term obligations.

• Cash Flow Monitoring: Implement regular cash flow forecasting to anticipate liquidity needs and avoid "symptoms of distress" such as delayed payments or urgent borrowing.

• Profit and Loss Transparency: Consider preparing and reviewing detailed profit and loss accounts internally, even if not required for filing, to better understand operational profitability and cost drivers.

• Diversify Revenue Streams & Scale: Explore opportunities to grow the workforce or diversify services to reduce operational risk and increase revenue stability.

• Succession and Contingency Planning: Given dependence on one director, develop plans for business continuity and succession to mitigate risks related to key-person dependency.

• Asset Utilization Review: Regularly assess the productive use of fixed assets to ensure investments are yielding appropriate returns and not tying up excessive capital.

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