BUILDER OF YOUR CHOICE LTD

Executive Summary

BUILDER OF YOUR CHOICE LTD is emerging from a period of financial strain with a positive net asset position but continues to face liquidity challenges evidenced by negative working capital and zero cash balances. The company’s financial health is currently fragile, requiring focused cash flow management, reduction of director loans, and operational discipline to avoid further distress and support sustainable recovery.

BUILDER OF YOUR CHOICE LTD - Analysis Report

Company Number: 13557814

Analysis Date: 2025-07-20 15:40 UTC

Financial Health Assessment for BUILDER OF YOUR CHOICE LTD

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1. Financial Health Score: D

Explanation:
The company is showing signs of financial distress but with some recent improvement. The net asset position has turned positive in the latest year, which is a good sign. However, the negative working capital and lack of liquid assets (cash) are symptoms of cash flow challenges. The financial health grade D reflects that while the company is not insolvent, its financial stability is fragile and requires active management to avoid deterioration.

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2. Key Vital Signs

Metric	2023 (£)	2022 (£)	Interpretation
Fixed Assets	15,921	17,231	Tangible assets slightly decreased, indicating normal depreciation and modest investment.
Current Assets	0	31	Critically low liquid assets; no cash available in 2023, showing poor short-term liquidity.
Current Liabilities	13,222	22,584	Current liabilities decreased, which is positive but still significant relative to assets.
Net Current Assets	-13,222	-22,553	Negative working capital (current assets - current liabilities) indicates liquidity stress.
Total Assets Less Current Liabilities	2,699	-5,322	Positive in 2023, an improvement from prior years, showing turnaround in net asset value.
Net Assets / Shareholders' Funds	2,699	-5,322	Net equity positive in 2023, reflecting retained earnings or capital injection to cover losses.
Director’s Loan Account (part of current liabilities)	10,326	19,370	High reliance on director's loan indicates dependency on insider funding to meet obligations.

Additional Observations:

• Average number of employees decreased from 2 to 1, possibly indicating cost-cutting measures.
• No audit required due to small company exemption; accounts unaudited which may limit thorough financial assurance.
• Turnover and profit/loss figures are not disclosed in detail, limiting full profitability analysis.
• Director is sole significant controller, indicating centralized decision-making.

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3. Diagnosis

BUILDER OF YOUR CHOICE LTD exhibits symptoms of financial distress but early signs of recovery. The company has struggled with negative working capital for at least two years, meaning it does not have enough short-term assets (like cash or receivables) to cover its short-term debts—a classic indicator of liquidity strain. This "cash flow congestion" can threaten day-to-day operations if not addressed.

However, the positive net asset position in the latest year is a vital sign of improvement, suggesting either a reduction in liabilities or accumulation of profits (or possibly capital injection). The reduction in director's loan from £19,370 to £10,326 signals some repayment or restructuring of insider financing, which may alleviate some pressure but still denotes dependency on internal funding.

The absence of cash at year-end is troubling — a "weak pulse" in liquidity terms — which means the company may face challenges paying immediate obligations without additional financing or improved cash inflows.

Overall, the company is in a fragile but not critical state. The fixed assets base is modest but stable, and the company has successfully managed to improve its net equity from negative to positive, indicating a potential turning point.

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4. Recommendations

To strengthen the financial wellness of BUILDER OF YOUR CHOICE LTD, the following actions are advised:

1. Improve Liquidity (Cash Flow Management):

   • Implement tighter cash flow forecasting and management to ensure sufficient cash buffers.
   • Seek to convert any receivables faster and negotiate better payment terms with suppliers to reduce current liabilities.
   • Consider short-term financing options (overdrafts, invoice factoring) cautiously to cover immediate cash needs.

2. Reduce Reliance on Director’s Loan:

   • Formalize a repayment plan or convert part of the director’s loan to equity to improve balance sheet robustness.
   • Avoid accumulating further director loan liabilities without clear repayment terms.

3. Increase Profitability and Revenue Visibility:

   • Since turnover is not detailed, focus on generating consistent profitable contracts, especially leveraging experience in domestic and commercial building projects.
   • Monitor project margins closely and manage contract costs to ensure projects contribute positively to cash flow.

4. Cost Control:

   • Maintain lean operations, possibly keeping staffing minimal as currently one employee.
   • Review overheads and non-essential expenditures regularly.

5. Regular Financial Monitoring:

   • Establish monthly management accounts to detect early warning signs of distress and enable timely corrective action.
   • Consider professional financial advice for restructuring or refinancing if liquidity problems persist.

6. Plan for Future Growth:

   • Once liquidity stabilizes, cautiously invest in marketing or equipment to grow the business without jeopardizing financial health.

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Executive Summary