What's happening at this company?

What's happening at this company?

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2 sMoKiN bArReLs

24,361 posts

191 months

Saturday 4th July
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Simpo Two said:
2 sMoKiN bArReLs said:
hehe You can't possibly guess that from those numbers.
I just did!
thumbup

biggrin

caiss4

Original Poster:

1,563 posts

153 months

Saturday 4th July
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Once again, thanks all for your input. I just wanted to be sure I hadn't missed anything glaringly obvious from the available information. My next step is to find a way to broach the subject with my potential SiL and get him a bit more savvy about what is actually happening to the business.

He has mentioned that the owner is talking about investing in new machines but with his level of engagement I find that hard to believe. There is also talk of SiL taking over the minority shareholding but I'd definitely want to see the operating accounts if that came to pass!

Countdown

27,694 posts

152 months

Saturday 4th July
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Cash is definitely leaking out of the business somewhere. It might be shareholders extracting profits, personally I think it's more likely that the company is making losses. The creditors figure has doubled over the 5 years, debtors hasn't increased. The balance sheet is only positive because of the Fixed Assets and I'd be very surprised if they are being shown at NRV

In short a couple of big red flags there.....

Birkin1932

737 posts

95 months

Saturday 4th July
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To me I see a possible fall in sales, looking at the debtors, a spike in the creditors, possibly by extended payment terms to allow the directors to carry on drawing dividends at the same rate

This looks like a cash grab on a slowly failing small company, until the net worth goes to zero, next accounts will be interesting.


caiss4

Original Poster:

1,563 posts

153 months

Saturday 4th July
quotequote all
Countdown said:
Cash is definitely leaking out of the business somewhere. It might be shareholders extracting profits, personally I think it's more likely that the company is making losses. The creditors figure has doubled over the 5 years, debtors hasn't increased. The balance sheet is only positive because of the Fixed Assets and I'd be very surprised if they are being shown at NRV

In short a couple of big red flags there.....
Thanks weeping

Birkin1932 said:
To me I see a possible fall in sales, looking at the debtors, a spike in the creditors, possibly by extended payment terms to allow the directors to carry on drawing dividends at the same rate

This looks like a cash grab on a slowly failing small company, until the net worth goes to zero, next accounts will be interesting.
Without a doubt sales will be down this year due to Covid and there doesn't appear to be any effort to ramp up business for the remainder of the year - just relying on their established customer base. The type of work they do is steady; they won't make up 3 months of lost business in 9 months.

Simpo Two

72,172 posts

221 months

Saturday 4th July
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caiss4 said:
Once again, thanks all for your input. I just wanted to be sure I hadn't missed anything glaringly obvious from the available information. My next step is to find a way to broach the subject with my potential SiL and get him a bit more savvy about what is actually happening to the business
I think the most likely future option is that he will stay there, then get made redundant/not paid and will need to find another job.

It's his life not yours; you can only be so helpful.

MaxFromage

454 posts

87 months

Sunday 5th July
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Do you have a breakdown of Creditors? This could tell you much of what you need to know, including potentially the profits made.

caiss4

Original Poster:

1,563 posts

153 months

Sunday 5th July
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MaxFromage said:
Do you have a breakdown of Creditors? This could tell you much of what you need to know, including potentially the profits made.
No, I'm not that intimate with the company. I don't think there's anything more insightful to be gleaned atm.

Ean218

1,650 posts

206 months

Sunday 5th July
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Just my 2 penn'orth but for a "precision" engineering company they have spent surprisingly little on kit over those 6 years.

sideways sid

1,121 posts

171 months

Thursday 9th July
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caiss4 said:
...Since he's been back all his work is from 'regular' customers and, to be fair, he's not short of work.
So to summarise, your not-yet Son-In-Law is in paid employment with a company that he doesn't own, has been furloughed in accordance with the law, and has returned to normal workload.

Did he ask you to investigate his employer using limited information on a car forum?