THE BIRD PVT LIMITED

Executive Summary

THE BIRD PVT LIMITED is a newly established food service business with a solid equity base but currently experiencing liquidity constraints due to negative working capital driven by director loans and short-term liabilities. While solvent and adequately capitalized, it faces early operational cash flow challenges typical for a startup. Focused management of working capital and cash flow will be critical to improving financial health and supporting sustainable growth.

THE BIRD PVT LIMITED - Analysis Report

Company Number: 14957852

Analysis Date: 2025-07-29 14:37 UTC

Financial Health Assessment for THE BIRD PVT LIMITED
As of the financial year ended 30 June 2024

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1. Financial Health Score: C

Explanation:
The company, recently incorporated in June 2023, shows a mixed financial profile typical of a new business finding its footing. The tangible net assets and shareholders' funds are positive, signaling initial capital and some retained earnings ("profit and loss account" of £15,546). However, the presence of net current liabilities (working capital deficit) indicates liquidity challenges. Overall, the company is in a cautious but stable condition, meriting a "C" grade—functioning but with symptoms of financial strain that require close management.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets (Tangible)	20,400	Healthy investment in plant & machinery for a new business.
Current Assets	23,068	Includes inventories, debtors, and cash—adequate liquidity sources.
Cash	16,008	Reasonable cash reserve supporting operations.
Debtors	143	Very low receivables, reflecting low credit risk or minimal sales on credit.
Current Liabilities	27,822	Includes director loans (£22,131), taxes, and accruals; liabilities exceed current assets.
Net Current Assets	-4,754	Negative working capital ("symptom of distress") indicating potential short-term liquidity issues.
Net Assets	15,646	Positive net asset base, reflecting overall solvency.
Shareholders’ Funds	15,646	Equity capital is positive but modest for business scale.
Number of Employees	5	Small workforce, typical for a micro/small enterprise.

Additional Notes:

• Director loans form a large portion of current liabilities, which may be acceptable short-term but should be monitored to avoid cash flow pressure.
• Depreciation of £3,600 shows asset usage consistent with business activity.
• VAT debtor is low, indicating low sales or prompt VAT settlement.

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3. Diagnosis

THE BIRD PVT LIMITED presents as a young food services company with initial capital investment in fixed assets and a positive equity base. The "healthy cash flow" component is indicated by a reasonable cash balance, but the negative net current assets reveal a liquidity "symptom of distress." This is mainly due to current liabilities exceeding short-term assets, driven substantially by director loans, which may be informal financing supporting early operations.

The company’s financial structure suggests it is solvent but operating with tight working capital. The small size and recent incorporation mean it is still establishing its market presence and operational efficiency. The absence of audit requirements and the use of small company accounting standards are appropriate for its size and simplify compliance.

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4. Recommendations

To improve financial wellness and move towards a stronger rating, the company should consider the following:

1. Improve Working Capital Management:

   • Aim to reduce current liabilities, especially director loans, by converting some to longer-term funding or repaying as cash flow improves.
   • Accelerate collection of any receivables and manage inventory efficiently to free up cash.

2. Strengthen Cash Reserves:

   • Maintain or grow cash reserves to buffer against short-term liquidity pressures.

3. Monitor Fixed Asset Utilization:

   • Ensure that the tangible assets are contributing effectively to revenue generation. Consider asset leasing or phased acquisitions if cash flow tightens.

4. Formalize Director Loans:

   • Establish clear terms for loans from directors to avoid potential disputes or cash flow surprises.

5. Plan for Growth and Profitability:

   • Focus on increasing sales and managing margins to build retained profits and improve net current assets.

6. Regular Financial Reviews:

   • Conduct monthly cash flow forecasts and financial reviews to detect and address any emerging issues early.

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