BOV ENGINEERING LTD

Executive Summary

BOV ENGINEERING LTD has demonstrated commendable financial recovery and growth in liquidity and net assets, indicating a healthy short-term financial condition. While the company operates on a small scale with limited assets and no employees, its cash flow and working capital improvements are positive signs. Continued focus on debtor management and operational expansion will support sustained financial wellness.

BOV ENGINEERING LTD - Analysis Report

Company Number: 12472013

Analysis Date: 2025-07-20 19:13 UTC

Financial Health Assessment Report for BOV ENGINEERING LTD
As of financial year ending 29 February 2024

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1. Financial Health Score: B (Good condition with room for improvement)

Explanation:
BOV ENGINEERING LTD demonstrates solid improvements in its financial position over recent years, particularly in liquidity and net assets. The company’s net current assets and shareholders’ funds have more than doubled in the past year, indicating healthier working capital and capital base. However, the company remains very small with modest tangible assets and zero employees, which suggests limited operational scale. There is also reliance on debtors and trade creditors that warrants monitoring. Overall, the financial “vital signs” show a healthy but small and developing business.

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2. Key Vital Signs & Interpretation

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	165,322	97,084	Significant increase in liquid and receivable assets; good liquidity improvement.
Cash	52,165	(9,015)	Cash position moved from negative (overdraft/deficit) to positive; strong symptom of healthy cash flow management.
Debtors	113,157	106,099	High receivables indicate sales on credit; needs monitoring for timely collections.
Current Liabilities	82,038	58,741	Increase in short-term debts, mainly trade creditors and tax liabilities; manageable but growing.
Net Current Assets	83,284	38,343	Working capital more than doubled, a positive sign of short-term financial health.
Net Assets / Shareholders’ Funds	83,843	39,088	Equity base increased, reflecting accumulated retained earnings; shows growing business value.
Tangible Fixed Assets	559	745	Minimal fixed assets, consistent with a service-oriented or small-scale engineering firm.
Employees	0	0	No employees reported, likely contractor-based or director-operated; limits scalability.

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3. Diagnosis: Financial Health and Business Condition

• Liquidity and Working Capital: The company exhibits a healthy liquidity profile, moving from a cash deficit to a positive cash balance of over £52k, which is a strong "heartbeat" indicating the business is generating and managing cash effectively. The increase in net current assets suggests the company can comfortably meet short-term obligations—a key "vital sign" of financial stability.

• Asset Base: While tangible fixed assets are minimal (£559), this is typical for an engineering design and installation services company where intellectual capital and service delivery dominate rather than heavy machinery or property. The low fixed asset base reduces risk of asset impairment but also limits collateral for financing.

• Debt and Creditors: Trade creditors and tax liabilities have increased, which requires careful management to avoid "symptoms of distress." The company is not overburdened, but increasing short-term payables need to be balanced against receivables and cash to maintain healthy operations.

• Profitability & Equity: The step-up in shareholders’ funds from £39k to £83k suggests accumulated profits or retained earnings have grown, indicative of profitable operations or capital injections. However, the absence of a profit and loss account filing means profitability trends cannot be fully confirmed.

• Operational Scale: The company reports zero employees, suggesting operations are run by the director or outsourced. While this keeps fixed costs low, it may limit capacity for growth and diversification.

• Compliance and Reporting: Accounts are filed on time and comply with small companies’ exemptions, indicating sound administrative health.

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4. Recommendations: Actions to Improve Financial Wellness

• Enhance Cash Conversion Cycle: Focus on faster collection of debtors (accounts receivable) to improve cash flow further. Consider credit control policies or incentives for early payment.

• Manage Creditors and Tax Liabilities: Regularly review trade payables and tax payments to avoid cash strain or penalties. Negotiate payment terms if possible to better align with receivables.

• Consider Growth Options: Explore opportunities to hire staff or contractors to expand operational capacity if demand increases. This can create value and reduce dependence on the director alone.

• Profit & Loss Transparency: File full profit and loss accounts to provide stakeholders with clearer insights into profitability and operational efficiency. This transparency can aid in securing finance or partnerships.

• Asset Investment: Evaluate the need for investment in tangible assets or technology that could improve service delivery or operational efficiency.

• Financial Monitoring: Maintain rigorous financial monitoring and forecasting to anticipate liquidity needs and avoid sudden distress.

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Medical Analogy Summary:

BOV ENGINEERING LTD shows a healthy financial pulse, with strong cash flow recovery and improved working capital acting as a robust cardiovascular system supporting the business. The symptoms of distress (increasing creditors and tax liabilities) are currently well-managed but require vigilance. The company's financial immune system is strengthened by growing equity, but operational capacity remains limited, akin to a patient who is stable but could benefit from increased muscle mass (resources) to better withstand future challenges.

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