BOUNCING STATISTICS SERVICES LTD

Executive Summary

Bouncing Statistics Services Ltd is operating with a fair but fragile financial position, indicated by negative working capital and declining equity. While cash balances and director loans provide some cushion, the company must improve liquidity management and pursue growth opportunities to build financial resilience. Proactive cash flow oversight and cost control will be key to sustaining business health.

BOUNCING STATISTICS SERVICES LTD - Analysis Report

Company Number: 13729385

Analysis Date: 2025-07-29 14:24 UTC

Financial Health Assessment: Bouncing Statistics Services Ltd

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1. Financial Health Score: C (Fair)

Explanation:
The company shows some positive indicators such as maintaining net assets and shareholder funds, but there are clear symptoms of financial strain including negative working capital, rising current liabilities, and a decline in net assets. These point to a fair but vulnerable financial position that requires careful management to avoid distress.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Current Assets	£7,802	Limited liquidity; mostly cash (£6,841)
Current Liabilities	£8,138	Slightly exceeds current assets, causing stress
Net Current Assets	-£336	Negative working capital; red flag for liquidity
Net Assets (Equity)	£233	Positive but very low equity base
Cash Balance	£6,841	Reasonably healthy cash but insufficient to cover all short-term liabilities
Debtors	£961	Some receivables, but small amount
Tangible Fixed Assets	£569	Small asset base; limited investment in equipment
Profit & Loss Reserve	£130	Small retained earnings; declining from prior year
Director Loans	£962 owed by company to directors	Indicates internal financing support

Interpretation of Vital Signs:

• The negative working capital ("net current assets") is a symptom of liquidity strain — the company may struggle to meet short-term obligations without relying on cash inflows or director loans.
• The net asset base has shrunk from £565 in 2021 to £233 in 2023, suggesting accumulated losses or reduced equity, a symptom of financial fatigue.
• Cash levels are reasonable relative to current assets but not sufficient to cover all current liabilities, indicating a tight cash flow position.
• Director loans show internal funding support, which can be a relief valve but also indicates external financing might be limited or unavailable.
• No employees currently; the business might be in an early growth stage or operating with contractors, potentially limiting fixed costs.

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3. Diagnosis

The company exhibits symptoms of liquidity stress with negative net current assets and current liabilities slightly exceeding current assets. Although cash on hand is relatively healthy, it does not fully cover short-term debts, which could lead to cash flow difficulties if receivables are delayed or expenses increase unexpectedly.

The decline in net assets and profit and loss reserves signals potential erosion of financial resilience, which may reflect operating losses or retained losses over the period since incorporation in 2021.

However, the presence of director loans indicates internal financial support, which can be a stabilizing factor but also a sign that external funding or profitability is insufficient.

The company is in the educational support services sector, which may have variable cash flow patterns depending on contracts, clients, and payment terms. The absence of employees suggests a lean operational model but could also limit capacity for growth.

Overall, the financial health is fair but fragile, with early warning signs that require careful cash flow management and possibly revenue growth to improve liquidity and equity.

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4. Recommendations

• Improve Working Capital Management:
  Focus on accelerating debtor collections and negotiating longer payment terms with creditors to reduce negative working capital symptoms.

• Enhance Cash Flow Forecasting:
  Implement detailed cash flow forecasts to anticipate liquidity gaps and allow proactive management.

• Explore Revenue Growth Opportunities:
  Strengthen sales or contracts in educational support services to increase turnover and build reserves.

• Consider Cost Control Measures:
  Keep fixed costs minimal and avoid unnecessary capital expenditures until financial position strengthens.

• Review Director Loan Arrangements:
  Formalize and monitor director loans carefully to ensure they do not create undue personal risk or tax complications.

• Seek External Advice:
  Engage financial advisors or accountants to explore funding options such as overdrafts or small business loans to support liquidity if needed.

• Prepare for Next Filing Deadlines:
  Ensure timely submission of accounts and confirmation statements to avoid penalties and maintain good standing.

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