ROGER BAIRD ASSOCIATES LIMITED

Executive Summary

Roger Baird Associates Limited has shown a financial recovery after prior years of negative equity and working capital challenges, with the latest accounts reflecting positive net current assets and shareholders' funds. However, the company remains financially fragile due to a thin liquidity buffer and high current liabilities dominated by tax obligations. Focused cash flow management and proactive handling of liabilities are essential to maintain stability and promote growth.

ROGER BAIRD ASSOCIATES LIMITED - Analysis Report

Company Number: SC688681

Analysis Date: 2025-07-29 20:42 UTC

Financial Health Assessment: Roger Baird Associates Limited

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1. Financial Health Score: C

Explanation:
The company shows signs of recovery and improvement compared to prior years but remains in a delicate financial position. The net current assets have turned positive in the latest year, indicating improved liquidity. However, the company is operating with relatively thin working capital and some history of negative equity, which points to financial strain in earlier periods. Overall, the financial health is fair but cautious vigilance is required.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	35,921	Healthy increase in short-term assets, primarily cash, showing liquidity improvement.
Cash at Bank	35,921	Entire current assets are cash, indicating no cash tied up in debtors or stock—good liquidity.
Debtors	0	No outstanding receivables; cash collection is efficient or no credit sales.
Current Liabilities	33,823	High short-term obligations; significant increase over prior years.
Net Current Assets	2,098	Positive but low; just enough to cover short-term debts, representing a fragile liquidity buffer.
Shareholders Funds (Equity)	2,098	Recently positive after years of negative equity; shows some restoration of net worth.
Tangible Fixed Assets	0	No long-term assets currently held; fully depreciated equipment.

Additional Observations:

• The company’s net current assets shifted from negative (£-2,877) in 2023 to a modest positive (£2,098) in 2024, indicating improved working capital but still slim margins.
• The increase in current liabilities (from £16,046 to £33,823) is significant and may be related to accrued taxes or social security liabilities (noted as £32,460 in 2024). This could represent a timing issue or potential cash flow strain.
• The retained earnings have moved from a deficit position (£-2,563) to a small positive balance (£1,998), suggesting the company generated profits or reduced losses in the latest period.

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3. Diagnosis

Roger Baird Associates Limited has been through a period of financial distress, as evidenced by prior years of negative equity and net current liabilities—classic "symptoms of distress" akin to a patient with a weakened immune system vulnerable to shocks. However, the latest financial year shows signs of "recovery," with liquidity improving and shareholders' equity moving into positive territory.

The company’s financial "vital signs" suggest a recent boost in cash resources, which is critical for ongoing operations and meeting short-term obligations. However, the high current liabilities—mostly taxation and social security—pose a risk if cash inflows are not sustained. The absence of fixed assets means the company has little tangible collateral and is likely reliant on intangible assets such as expertise and client relationships.

The thin net current assets margin implies that even small changes in cash flow could destabilize the company’s operations. The company is akin to a patient who has stabilized but remains fragile and requires careful monitoring and management to avoid relapse.

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4. Recommendations

To improve financial wellness and strengthen the company’s financial health, the following actions are advised:

1. Cash Flow Management:
   Maintain strict controls on cash inflows and outflows. Build a cash reserve buffer beyond the current thin margin to cushion against unexpected expenses or delays in payments.

2. Liability Management:
   Investigate the nature of the increased current liabilities, especially tax and social security obligations. Engage with tax authorities if needed to arrange payment plans to avoid penalties or enforcement actions.

3. Profitability Focus:
   Continue to improve operational efficiency and profitability to build retained earnings further. Monitor expenses closely and seek opportunities to increase revenue without proportionate cost increases.

4. Asset Base Consideration:
   Although fixed assets are minimal, consider strategic investment in necessary equipment or software that might improve efficiency or service delivery without straining liquidity.

5. Financial Reporting and Monitoring:
   Regularly review financial reports and key metrics monthly or quarterly to catch early warning signs of distress. Use budgeting and forecasting tools to anticipate cash flow needs.

6. Stakeholder Communication:
   Keep directors and shareholders regularly informed of financial status and plans to ensure alignment and support.

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