SIMPLE BRIDGING SH LTD

Executive Summary

SIMPLE BRIDGING SH LTD maintains a solid net asset position and growing equity but faces liquidity challenges due to low cash reserves and high debtor balances. Strengthening cash flow management and restructuring debt are essential to improve financial stability and support sustainable growth.

SIMPLE BRIDGING SH LTD - Analysis Report

Company Number: 13257341

Analysis Date: 2025-07-29 15:17 UTC

Financial Health Assessment for SIMPLE BRIDGING SH LTD (as of 31 March 2024)

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1. Financial Health Score: B-

Explanation:
SIMPLE BRIDGING SH LTD demonstrates a moderately stable financial position with positive net assets and growing equity. However, the company shows signs of financial strain due to declining current assets and high levels of current liabilities. The low cash reserves relative to large debtor balances introduce liquidity risk, indicating symptoms of cash flow stress despite overall positive net worth.

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2. Key Vital Signs (Core Financial Metrics):

Metric	2024 Value	Interpretation
Current Assets	£9,678,128	Includes £9.57M debtors; declining from £11.52M (2023) indicating potential collection issues or slowdown in sales.
Cash and Cash Equivalents	£104,022	Very low cash reserves compared to liabilities, signaling tight liquidity.
Current Liabilities	£7,192,072	Large short-term obligations; falling from £8.67M in 2023 but still substantial.
Net Current Assets (Working Capital)	£2,486,056	Positive working capital, suggesting more short-term assets than liabilities, but shrinking year-on-year.
Non-current Liabilities	£2,216,938	Long-term debt obligations reducing slightly from previous year, which is positive.
Net Assets (Equity)	£269,118	Positive equity, improved from prior year (£156,712), indicating retained earnings growth.
Debtor Days Approximation	High (Debtors £9.57M vs Revenue Unknown)	Large debtor balance may imply slow collection or credit risk.
Share Capital	£1.00	Minimal share capital, typical for small private companies, but all equity is retained earnings.

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3. Diagnosis (What the Numbers Reveal About Business Health):

• Healthy Signs:

  • Positive net assets and shareholder funds reflect an underlying profitable or at least solvent business.
  • Reduction in both current liabilities and long-term liabilities signals some debt management and potential reduction in financial risk.
  • Consistent filing and compliance show good governance and regulatory adherence.

• Symptoms of Financial Stress:

  • Very low cash reserves compared to high debtor balances and liabilities indicate a liquidity bottleneck — the company might struggle to meet immediate payment obligations if debtor collections slow further.
  • Declining current assets from £11.52M to £9.67M suggest either a drop in sales or difficulties in collecting receivables, which could affect cash flow.
  • Large portion of current assets tied up in debtors presents a risk: if these debts are not collected timely, cash flow problems may worsen, akin to a "heart" (cash flow) that is weak despite a "body" (balance sheet) that appears intact.
  • Limited cash buffer means the company must carefully manage working capital to avoid distress.

• Business Activity:
  Classified under SIC code 64999 ("Financial intermediation not elsewhere classified"), the company likely operates in a niche financial service or lending sector (consistent with "Bridging" in the name), which typically involves managing loans and receivables. This explains the large debtor balances and reliance on timely repayments.

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4. Recommendations (Actions to Improve Financial Wellness):

1. Improve Cash Flow Management:

   • Accelerate debtor collections through stricter credit control, incentivize early payments, or consider factoring receivables to boost liquidity.
   • Maintain a minimum cash reserve to cover at least 1-2 months of current liabilities to avoid a liquidity crisis.

2. Debt Restructuring and Management:

   • Explore refinancing options to reduce short-term liabilities or convert some current debt into longer-term obligations, smoothing cash flow demands.

3. Enhance Financial Reporting:

   • Prepare fuller financial statements including Profit & Loss accounts to better monitor profitability trends and cost management.
   • Regular cash flow forecasting to anticipate shortfalls and plan accordingly.

4. Operational Efficiency:

   • Review operational expenses and overheads to optimize costs without compromising service quality.
   • Explore growth opportunities to increase turnover and diversify revenue streams, reducing reliance on debtor repayments.

5. Strategic Planning:

   • Engage with financial advisors to assess capital structure and funding strategies, potentially increasing share capital if appropriate to strengthen equity base.

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Summary in Medical Analogy:

SIMPLE BRIDGING SH LTD exhibits a "stable patient" with a strong skeletal structure (net assets and equity) but a "weak pulse" in terms of cash flow and liquidity. The symptoms suggest the company needs to strengthen its "circulatory system"—the cash flow from debtors—to ensure the business can "breathe" and meet its obligations smoothly. Early intervention with improved credit management and debt restructuring is crucial to prevent financial distress.

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