Company Number: SC706166

Analysis Date: 2025-07-19 12:54 UTC

Financial Health Assessment for BRUSHFINCH PROPERTY LIMITED

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1. Financial Health Score: C (Moderate Concern)

BRUSHFINCH PROPERTY LIMITED exhibits signs of financial stress primarily due to negative net assets and persistent working capital deficits, despite owning significant fixed assets. The company’s financial structure shows symptoms that warrant close monitoring and corrective action to improve liquidity and solvency, but it is not yet in critical condition.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£564,322	Healthy asset base, mainly property assets held.
Current Assets	£13,404	Very low short-term liquid assets, restricting cash flow flexibility.
Cash	£9,717	Cash reserves are minimal relative to liabilities.
Current Liabilities	£223,515	High short-term debts, mainly director’s loan account.
Net Current Assets (Working Capital)	-£210,111	Negative working capital indicates liquidity stress.
Total Assets less Current Liabilities	£354,211	Indicates value after covering short-term debts, still positive.
Long-term Liabilities (Bank Loans)	£358,495	Significant long-term debt burden.
Net Assets (Shareholders' Funds)	-£4,284	Negative equity shows accumulated losses or over-leverage.

Additional Context:

• The director’s loan account (~£222k) forms the major part of current liabilities, which suggests internal financing but must be managed carefully.
• The company holds tangible assets valued at over half a million pounds, indicating asset strength, but these are illiquid.
• Negative net current assets (working capital) are consistent for recent years, highlighting ongoing liquidity challenges.
• Shareholders’ funds have moved from a small positive in 2021 to negative in recent years, indicating erosion of equity.

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3. Diagnosis: Financial Condition Overview

Brushfinch Property Limited is akin to a patient with a sturdy skeleton (fixed assets/property) but weak circulatory health (cash flow and liquidity). The company owns valuable property assets but is experiencing symptoms of financial distress through negative working capital and negative net assets. This shows that current liabilities exceed current assets, creating strain on the company’s ability to meet short-term obligations without relying heavily on long-term financing or director loans.

The persistent negative working capital indicates the company’s cash flow is under pressure, which could lead to difficulties in paying suppliers and creditors promptly if not addressed. The negative net assets suggest the company has accumulated losses or liabilities exceeding assets, which is a warning sign of potential solvency issues if the trend continues.

However, the significant fixed assets provide a buffer and potential collateral for refinancing or restructuring debt. The company’s status remains active, and there are no overdue filings or signs of administration, which is positive.

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4. Recommendations: Steps to Improve Financial Wellness

1. Improve Liquidity and Working Capital Management:

   • Explore ways to increase liquid assets, such as negotiating longer payment terms with creditors or accelerating receivables collection.
   • Consider converting some fixed assets into cash if feasible, or leveraging property assets to secure additional working capital facilities.

2. Reduce Reliance on Director’s Loan Account:

   • Formalize repayment plans for director loans to improve transparency and reduce short-term liabilities.
   • Seek external financing options to diversify debt sources and reduce pressure on director loans.

3. Monitor and Manage Debt Levels:

   • Engage with lenders to restructure bank loans if cash flow is constrained.
   • Maintain regular financial forecasting to anticipate cash flow gaps and plan accordingly.

4. Enhance Profitability and Retain Earnings:

   • Review operational costs and revenue streams to improve profitability.
   • Retain profits to rebuild shareholders’ equity and reverse negative net assets.

5. Regular Financial Health Checks:

   • Conduct quarterly reviews focusing on cash flow, working capital, and equity to catch early warning signs.
   • Prepare for timely statutory filings to maintain good standing and investor confidence.

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