NICK BARRY LTD

Executive Summary

NICK BARRY LTD exhibits a fair financial condition with positive but declining liquidity and equity levels. The company should prioritise improving cash flow management and cost control to prevent further erosion of financial strength. With these measures, it can enhance stability and support sustainable growth in its engineering services niche.

NICK BARRY LTD - Analysis Report

Company Number: 12399033

Analysis Date: 2025-07-29 14:13 UTC

Financial Health Assessment for NICK BARRY LTD (As of 31 January 2025)

---

1. Financial Health Score: C (Fair)

Explanation:
NICK BARRY LTD shows a modest but stable financial position typical of a micro-entity startup or small business. The company maintains positive net current assets and net assets, indicating it is not insolvent. However, the declining trend in net assets and working capital over recent years signals some emerging financial strain or reduced buffer. Overall, the company is financially stable but with signs of mild stress; thus, a grade of C reflects fair health with room for improvement.

---

2. Key Vital Signs (Core Financial Metrics)

Metric	2025 (£)	2024 (£)	Interpretation
Current Assets	3,308	2,837	Small increase, indicating slight growth in liquid assets or receivables.
Current Liabilities	2,990	2,368	Noticeable increase, raising short-term obligations.
Net Current Assets (Working Capital)	318	469	Down from last year, showing reduced short-term liquidity cushion ("healthy blood flow").
Net Assets (Equity)	318	469	Declining equity base, signaling potential "loss of muscle mass" in business value.
Share Capital	1.00	1.00	Minimal share capital, typical for micro companies.

Additional Context:

• The company's net current assets remain positive, meaning it can meet its short-term debts, but the narrowing margin is a symptom of increasing financial pressure.
• Net assets have more than halved since 2021 (£4,054), suggesting accumulated losses or asset depletion over time.

---

3. Diagnosis (What the Financial Data Reveals)

• Liquidity Status: The company has a "healthy cash flow" in that current assets exceed current liabilities, but the working capital cushion is very thin (£318). This thin margin could lead to cash flow difficulties if unexpected expenses arise or receivables are delayed.

• Equity Erosion: The decline in net assets from £4,054 in 2021 to £318 in 2025 indicates the company may be experiencing ongoing losses, erosion of retained earnings, or possibly asset write-downs. This is a symptom of financial distress that should be carefully monitored.

• Size and Scale: With only one employee and micro-entity status, the company operates at a very small scale, which limits financial flexibility.

• Control and Governance: The sole director and 100% controlling shareholder, Mr Nicholas Mark Barry, indicates streamlined decision-making but also concentration risk if succession or continuity plans are absent.

• Industry Context: Operating in technical testing and engineering activities, the company likely faces competitive pressures and capital demands to maintain equipment and expertise.

---

4. Prognosis (Future Financial Outlook)

• If current trends continue without revenue growth or cost control improvements, the company's equity and liquidity cushion may continue to shrink, increasing the risk of financial distress.

• However, the company is not currently in financial peril and has the potential to stabilize or improve its position with prudent financial management, including improving cash flow management and controlling liabilities.

---

5. Recommendations (Actions to Improve Financial Wellness)

• Improve Working Capital Management: Enhance collection of receivables and control payables to maintain or increase the net current assets buffer. Consider negotiating longer payment terms with suppliers or faster payments from customers.

• Cost Control: Review fixed and variable costs to identify savings opportunities to halt equity erosion.

• Revenue Growth: Explore new contracts or market opportunities in technical testing and engineering to increase turnover.

• Financial Monitoring: Implement regular financial reviews to catch symptoms of distress early and adjust strategies accordingly.

• Capital Injection: Consider additional shareholder funding or loans if working capital constraints persist, but balance this with the cost of financing.

• Succession and Risk Planning: Develop contingency plans in case of key-person risk, given the sole director and shareholder structure.

---

Summary

NICK BARRY LTD currently maintains a positive but shrinking liquidity and equity position, indicating mild financial stress yet operational viability. Immediate focus on working capital management and cost control can strengthen its financial resilience. With strategic efforts to boost revenues and monitor finances, the company can improve its financial health and reduce risk.