OSM BUILDING SERVICES LTD

Executive Summary

OSM Building Services Ltd is a micro-sized, newly incorporated company showing concerning signs of financial distress, including worsening negative net assets and liquidity shortages. Immediate attention to cash flow management, cost control, and capital reinforcement is critical to stabilize the business and improve its financial health. Without intervention, the company faces an increasing risk of insolvency.

OSM BUILDING SERVICES LTD - Analysis Report

Company Number: 14457785

Analysis Date: 2025-07-29 12:10 UTC

Financial Health Assessment for OSM BUILDING SERVICES LTD (Period ending 30 November 2024)

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1. Financial Health Score: D

Explanation:
The company exhibits clear signs of financial distress with persistent negative net assets and worsening working capital. While still operational and compliant with filing requirements, the balance sheet reveals symptoms that require urgent attention to avoid further deterioration.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	609	4,455	Dramatic decline in liquid resources
Current Liabilities	4,166	5,556	Slight improvement but still large relative to assets
Net Current Assets	-3,557	-1,101	Negative working capital, worsening liquidity
Net Assets (Shareholders Funds)	-5,117	-1,881	Accumulated losses increasing, indicating insolvency risk
Average No. Employees	1	1	Very small scale operation
Filing Status	Up-to-date	Up-to-date	No compliance issues noted

Interpretation:

• Working Capital (Net Current Assets) is negative and has worsened by more than threefold, indicating the company does not have enough short-term assets to cover its immediate liabilities—a "symptom of cash flow distress."
• Net Assets are negative and declining, showing that the company’s liabilities exceed its assets, a classic sign of balance sheet weakness or insolvency risk.
• The sharp reduction in current assets (cash/debtors/inventory) signals potential liquidity problems.
• The company is a micro-entity with only one employee (the director), indicating limited operational scale and likely constrained resources.

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3. Diagnosis

Underlying Business Health:
OSM Building Services Ltd is a micro-sized private company engaged in quantity surveying activities. Despite being relatively new (incorporated in late 2022), it has recorded consistent and increasing net liabilities over its first two years. The financial statements show no audit requirement, reflecting the small size, but this also means less scrutiny.

The negative and worsening working capital suggests the company is struggling to meet short-term obligations from its available liquid resources. This can be due to delayed payments from clients, high short-term debts, or insufficient cash generation from operations. The increasing net liabilities imply accumulated losses, possibly from operating losses or shareholder loans that are not being repaid.

Symptoms of Financial Distress:

• Persistent negative net assets ("balance sheet in the red")
• Deteriorating liquidity position ("tight cash flow")
• Limited scale and possibly limited ability to absorb shocks or invest in growth
• No indication of external financing or asset backing visible in the data

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4. Recommendations

To improve the financial wellness and avoid progression towards insolvency or forced liquidation, the company should consider the following actions:

1. Improve Cash Flow Management:

   • Accelerate client payments, negotiate better payment terms with customers and suppliers.
   • Consider short-term financing solutions (e.g., overdrafts or invoice financing) to bridge liquidity gaps.

2. Cost Control and Revenue Enhancement:

   • Review operating expenses and reduce discretionary spending.
   • Explore opportunities to increase sales or diversify services within the quantity surveying niche.

3. Capital Injection:

   • The sole director/shareholder may need to inject new capital or convert shareholder loans into equity to strengthen the balance sheet.

4. Financial Monitoring and Planning:

   • Implement regular financial review cycles to monitor liquidity and profitability closely.
   • Prepare detailed cash flow forecasts to anticipate and manage shortfalls.

5. Seek Professional Advice:

   • Engage a financial advisor or accountant to assist with restructuring plans and explore options such as refinancing or grant funding.

6. Maintain Compliance:

   • Keep up-to-date with all filings to avoid penalties or regulatory scrutiny, which could compound financial strain.

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