RICKY BELL LTD

Executive Summary

RICKY BELL LTD shows a sturdy asset foundation but faces liquidity and working capital challenges that threaten short-term financial stability. Immediate action to improve cash flow, reduce liabilities, and formalize director funding is essential to restore healthy financial vitality and long-term viability.

RICKY BELL LTD - Analysis Report

Company Number: 14183833

Analysis Date: 2025-07-29 17:16 UTC

Financial Health Assessment of RICKY BELL LTD as at 30 June 2024

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1. Financial Health Score: D

Explanation:
The company shows some critical signs of financial distress, particularly in its liquidity and working capital position, which are key vital signs for short-term financial health. While it holds significant fixed assets (property), its current liabilities substantially exceed its current assets, creating a negative working capital situation. This imbalance reflects symptoms of financial strain that could impact ongoing operations and creditor confidence.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Cash	£12,659	Low cash reserve, but up from prior year (£5,197). A small positive sign but insufficient to cover short-term debts.
Current Liabilities	£260,866	Very high current liabilities relative to cash and current assets, indicating potential liquidity issues.
Net Current Assets (Working Capital)	-£248,207	Negative working capital indicating the company may struggle to meet short-term obligations. This is a critical symptom of distress.
Fixed Assets (Property)	£258,676	Significant investment in fixed assets, showing capital strength but these are illiquid.
Total Assets less Current Liabilities	£10,469	Slightly positive but marginal net asset position after current liabilities.
Shareholders’ Funds (Equity)	£10,469	Very low equity base, showing limited buffer against losses or liabilities.
Director’s Advances (Debts to Director)	£258,576	Large amount owed to the director, included in creditors, indicating reliance on director financing.

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3. Diagnosis

RICKY BELL LTD is akin to a patient with a strong skeletal frame (fixed assets in property) but weak circulatory and immune systems (liquidity and working capital). The company holds a significant property asset, which is a positive foundation for long-term stability. However, the symptoms of distress are clear in the negative working capital and high current liabilities that far exceed liquid resources.

The company’s cash position has improved slightly over the last year, which is a positive sign, but it remains insufficient to cover short-term debt obligations. The high amount owed to the director as a creditor suggests the company depends heavily on internal financing to keep operations going, which may not be sustainable long term without profitable operations or external funding.

The equity base is minimal, implying a thin margin of safety for creditors and investors. The absence of a profit and loss statement limits insights into operational performance, but the balance sheet alone signals tight financial conditions.

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4. Recommendations

• Improve Liquidity and Working Capital:
  The company should focus on increasing liquid assets or reducing current liabilities to restore working capital to a healthy positive level. This might involve negotiating longer payment terms with creditors, accelerating receivables collection, or injecting additional cash equity.

• Director Financing Management:
  The large amount owed to the director indicates reliance on insider funding. It is advisable to formalize this arrangement with clear terms or seek external financing to diversify funding sources and reduce risk concentration.

• Asset Utilization:
  Explore opportunities to monetize or leverage the fixed property asset, such as refinancing, to improve cash reserves without compromising long-term asset security.

• Operational Profitability Insight:
  Prepare and review full income statements to identify operational strengths and weaknesses and develop strategies to improve profitability and cash flow from core activities.

• Financial Monitoring:
  Implement regular financial health check-ups to monitor liquidity ratios and ensure early detection of further distress symptoms.

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Executive Summary

RICKY BELL LTD has a solid asset base in property but exhibits significant liquidity challenges, with current liabilities far exceeding liquid assets, leading to a negative working capital position. The company relies heavily on director loans to manage short-term obligations, indicating financial strain. To improve financial wellness, it must focus on enhancing liquidity, managing insider financing, and leveraging assets more effectively while gaining clearer insight into operational profitability.