DUNCHIDEOCK BARTON LIMITED

Executive Summary

Dunchideock Barton Limited shows a solid asset base growth but faces liquidity challenges, indicated by high current liabilities and minimal current assets. While the company remains solvent with positive net assets, urgent measures to improve short-term cash flow and working capital management are needed to avoid financial distress.

DUNCHIDEOCK BARTON LIMITED - Analysis Report

Company Number: 14078045

Analysis Date: 2025-07-29 12:09 UTC

Financial Health Assessment of DUNCHIDEOCK BARTON LIMITED

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1. Financial Health Score: C

Explanation:
The company demonstrates a modest but positive net asset position with growth in fixed assets; however, it suffers from significant working capital deficiency (net current liabilities), indicating liquidity challenges. The overall financial condition is stable but fragile, requiring close attention to short-term obligations and cash flow management.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	539,000	Healthy increase (+£102k from prior year), indicating investment in long-term farming assets.
Current Assets	460	Very low cash/short-term assets, a potential symptom of liquidity stress.
Current Liabilities	473,494	High short-term debts or payables, presenting immediate financial obligations.
Net Current Assets (Working Capital)	-473,034	Negative working capital, signaling that current liabilities far exceed current assets, a red flag for liquidity.
Net Assets (Equity)	65,294	Positive equity, showing the company’s assets exceed liabilities overall, but margin is thin.
Capital and Reserves	65,294	Reflects shareholders’ funds, consistent with net assets.

Additional Notes:

• The company is a micro-entity operating in mixed farming (SIC 1500), a sector often capital intensive with seasonality in cash flows.
• No audit required and financials prepared under micro-entity standards (FRS 105), typical for small companies.
• Employment level stable at 2 persons (directors included).
• The directors are also significant controllers, each owning 25-50% shares and voting rights, showing concentrated ownership.

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3. Diagnosis: What the Financial Data Reveals About Business Health

• Asset Base Growth: The increase in fixed assets from £437,000 to £539,000 is a positive sign of investment and growth in farming infrastructure or land, which is vital for long-term sustainability. This is akin to a patient building muscle strength.

• Liquidity Symptoms: The extremely low current assets (£460) versus high current liabilities (£473,494) indicate the company has a liquidity crunch—a classic symptom of financial distress. This is like a patient with good overall health but dangerously low blood pressure, risking collapse from short-term shocks.

• Negative Working Capital: Net current liabilities of nearly half a million pounds suggest that the company relies heavily on creditor financing or short-term borrowing to fund operations. This is a critical symptom that could lead to solvency issues if not managed carefully.

• Positive Net Assets: Despite liquidity concerns, the company maintains a positive net asset position (£65,294). This suggests that while short-term liquidity is a concern, the company’s long-term solvency is intact, akin to a patient with healthy bones but weak circulation.

• Micro-Entity Status: The company’s small size limits the amount of publicly available financial information, making it harder to assess profitability, cash flow, and debt servicing capability in detail.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Improve Liquidity Management:

   • Prioritize building current assets, especially cash reserves, through better cash flow forecasting and management.
   • Negotiate extended payment terms with suppliers or seek short-term financing at favourable rates to manage working capital gaps.

2. Review Financing Structure:

   • Consider restructuring short-term liabilities into medium or long-term debt to reduce pressure on immediate cash flows.
   • Explore government grants or agricultural subsidies to improve cash inflows.

3. Enhance Profitability Tracking:

   • Even though profit and loss figures are not publicly filed, internally monitoring profit margins and cost controls is essential to ensure sustainable operations.

4. Contingency Planning:

   • Prepare for seasonal fluctuations in farming revenue by maintaining a cash buffer and flexible cost structure.
   • Monitor key financial indicators regularly to detect early signs of distress.

5. Engage Financial Advisory:

   • Seek advice from a financial expert specialized in agricultural businesses to optimize asset utilization and financial planning.

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