D & B BARRATT LTD

Executive Summary

D & B Barratt Ltd is currently in poor financial health, marked by negative net assets and persistent losses, indicating serious liquidity and solvency challenges. Immediate action to improve cash flow, reduce costs, and seek additional funding is essential to avoid further deterioration. With prompt and decisive measures, there is a pathway to stabilize and recover the company’s financial condition.

D & B BARRATT LTD - Analysis Report

Company Number: 13527985

Analysis Date: 2025-07-20 17:49 UTC

Financial Health Assessment of D & B Barratt Ltd

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1. Financial Health Score: D

Explanation:
D & B Barratt Ltd currently exhibits multiple signs of financial distress, including persistent negative net assets and a worsening working capital deficit. The company has been operating at a loss consistently over its financial history, with significant erosion of shareholder equity. While the company is still active and filing on time, the balance sheet reveals symptoms akin to a patient with chronic illness that requires urgent attention to restore health.

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2. Key Vital Signs

Metric	Latest Value (2024)	Interpretation
Net Current Assets	£-9,243	Negative working capital — company owes more short-term than it owns in liquid assets; liquidity stress.
Net Assets (Equity)	£-4,857	Negative equity indicates accumulated losses exceed invested capital; company is "underwater".
Cash Balance	£569	Very low cash reserves to cover immediate obligations; "weak pulse" in cash flow.
Loss for Year	£4,124	Large loss in latest year, worsening financial condition ("symptoms of distress").
Trade Debtors	£0	No receivables, possibly indicating limited sales or collection issues.
Current Liabilities	£9,812	High near-term obligations putting pressure on liquidity.
Director Loan	£2,534	Interest-free loan from director is a temporary lifeline but increases related party risk.
Employee Count	1	Micro-business scale with limited operational capacity.

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3. Diagnosis

D & B Barratt Ltd presents a classic case of a micro-business struggling with severe liquidity and solvency issues. The company’s balance sheet shows:

• Chronic negative working capital: Current liabilities far exceed current assets, meaning the company lacks the liquid resources to meet short-term debts without external support.
• Negative shareholders’ funds: The accumulated losses have eroded the equity base, signaling insolvency on a balance sheet basis.
• Declining asset base: Tangible fixed assets are modest but depreciating; no significant investments to improve earning capacity.
• Worsening profitability: The company incurred a substantial loss in the latest year (£4,124), much higher than prior years, indicating operational or market challenges.
• Reliance on director financing: The director’s loan supports immediate cash needs but is not a sustainable source of funds.

While the director expresses a going concern assumption, the financial "vital signs" exhibit symptoms consistent with serious financial distress. Without intervention, the company risks insolvency or may require restructuring.

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4. Recommendations

To restore financial health, D & B Barratt Ltd should consider the following targeted actions:

a) Improve Liquidity ("Rehydrate the Cash Flow")

• Tighten working capital management: Accelerate debtor collections, negotiate extended payment terms with creditors, and reduce unnecessary expenses.
• Seek additional capital injection: Consider equity investment or external financing to bolster cash reserves and reduce reliance on director loans.

b) Control Costs and Enhance Profitability ("Address the Underlying Illness")

• Review operations: Identify loss-making activities or inefficiencies; optimize resource use since the company has only one employee.
• Explore revenue growth: Given no trade debtors, focus on marketing or sales initiatives to improve turnover.

c) Strategic Financial Restructuring ("Stabilize the Patient")

• Negotiate with creditors: Seek payment holidays or restructuring to ease immediate financial pressure.
• Director support formalization: Clarify terms of director loans to ensure transparency and plan for repayment.

d) Monitor and Report Regularly ("Track Recovery Progress")

• Implement monthly cash flow forecasts and management accounts to spot issues early.
• Engage professional advice if financial distress continues to deepen.

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Medical Analogy Summary

D & B Barratt Ltd is currently experiencing the "symptoms of financial distress," including a "weak pulse" in cash flow and a "critical deficiency" in working capital. The "patient" requires immediate liquidity support ("IV fluids") and operational "treatment" to restore profitability and solvency. Without intervention, the prognosis is guarded with a risk of "financial collapse."

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