Any financial types cast a look at this please
Discussion
Early days but one company I have been asked to get involved in seems interesting, I ran the risk disk and got the results below, I see a jump in the last 2 years plus they have moved into a nice rented unit (possibly sold a smaller owned unit) but the jump puzzles me - could they have been very profitable and sat on the cash - I dont think so. I am trying to think what could cause such a increment in assets in one year.
Thoughts please
nb the business is a small "throw everything on ebay / amazon" type business that scares the life out of me BUT it seems to be working for them.
Thoughts please
nb the business is a small "throw everything on ebay / amazon" type business that scares the life out of me BUT it seems to be working for them.
The rise is in current assets, 50K in 20123/13 and 90K in 2013/14.
That is normally made up of debtors and stock. So, if their turnover is increasing they will need more stock and they will have more debtors.
However if it is an internet busines they shouldn't really have many debtors so it must be stock.
That is normally made up of debtors and stock. So, if their turnover is increasing they will need more stock and they will have more debtors.
However if it is an internet busines they shouldn't really have many debtors so it must be stock.
I think they had a great business making good money at a certain size, they have "gone for it" bigger premises and more staff inc managers and now they are struggling to make money (I think)
If I put £ in I fear it would be burnt quickly but yes I will be getting full accounts soon this only came up this morning
If I put £ in I fear it would be burnt quickly but yes I will be getting full accounts soon this only came up this morning
HarryW said:
I'm Very much an uninformed amateur at this, but when did they start up? And what is the turnover and gross profit, those seem like the most important bits missing to me off that spread sheet?
It's a risk disk screen print of info filed at companies house, micro business so therefore very limited information. As others have said full accounts will provide more info like the things you have asked for.Fixed assets (i.e. land, buildings, machinery, vehicles) have hardly changed at all.
Current assets have gone up a lot.
The main types of current assets you see in business es are stock of goods for sale/materials, cash in bank and debtors (i.e. money owed to the business).
Debtors do not seem to have changed much.
It seems to me then that the amount of cash in their bank account has gone up dramatically or they are holding increased levels of stock for resale.
Current assets have gone up a lot.
The main types of current assets you see in business es are stock of goods for sale/materials, cash in bank and debtors (i.e. money owed to the business).
Debtors do not seem to have changed much.
It seems to me then that the amount of cash in their bank account has gone up dramatically or they are holding increased levels of stock for resale.
Eric Mc said:
Current assets have gone up a lot.
Correct me if I am wrong but this is my puzzler - for this to happen to such a high degree they cannot have had a cash injection as it would show in liabilities or can you put money in without it showing?If not a cash injection then they have had a spectacularly profitable 13/14 - really amazing.
Anything I have missed ? seems too good to be true but knowing the stuff they sell (cheap tat) and the pricey channels (ebay and amazon) I just cannot see it and wonder what the catch is.
Where have those figures been input from? Is there any form of auditing?
I ask because I've often done a company check and the figures that have come back are do far removed from the reality that, on further investigation they are little more than a guess and designed to make you pay or subscribe to the generating site to see more, often full accounts test tell a very different picture.
Don't know if yesterday the case here.
With them being reasonably well established they should have a minimum of two tears of audited accounts that will give you a clearer picture ( not trying yo tell you things you know) that you can take a more informed decision from.
I ask because I've often done a company check and the figures that have come back are do far removed from the reality that, on further investigation they are little more than a guess and designed to make you pay or subscribe to the generating site to see more, often full accounts test tell a very different picture.
Don't know if yesterday the case here.
With them being reasonably well established they should have a minimum of two tears of audited accounts that will give you a clearer picture ( not trying yo tell you things you know) that you can take a more informed decision from.
HarryW said:
I'm Very much an uninformed amateur at this, but when did they start up? And what is the turnover and gross profit, those seem like the most important bits missing to me off that spread sheet?
Harry,Don't forget the old adage, 'turnover is vanity, net profit is sanity'
Phil
DSLiverpool said:
Far to small to be audited, in my experience you can "over value " stock as it's unlikely to be checked at this size but it's still not legal / ethical .
This was my 1st thought, over value current stock to make business look more attractive maybe? Or a genuine error but that seems unlikely, as Eric says we need to see more detailed info. I'm a chartered accountant.
For this size of business these figures will be be based upon abbreviated non-audited accounts that have been filed at Companies House.
The increases in working assets shown will be due to profits if the figures are all accurate.
A recorded increase can also be achieved by overvaluing closing stock or other assets. If they are looking to attract investment they may be inclined to paint a rosy picture of assets.
Of course it could be just a great little business. Margins can be very high on low cost items.
Are the current owners taking salaries? If not then that would eat much of the profit.
What return will you get on your investment? Will you be involved in decision making? Wil you be making a loan at a fixed return or buying equity? What is the dividend policy? Will you actually get a dividend? How will you crystalize your investment? Exit strategy?
Lots of questions!
Can the business be sucessfully scaled up or is it ideally suited to a couple of mates running from a small unit? Lots of businesses are like this. Great little businesses but not investable.
For this size of business these figures will be be based upon abbreviated non-audited accounts that have been filed at Companies House.
The increases in working assets shown will be due to profits if the figures are all accurate.
A recorded increase can also be achieved by overvaluing closing stock or other assets. If they are looking to attract investment they may be inclined to paint a rosy picture of assets.
Of course it could be just a great little business. Margins can be very high on low cost items.
Are the current owners taking salaries? If not then that would eat much of the profit.
What return will you get on your investment? Will you be involved in decision making? Wil you be making a loan at a fixed return or buying equity? What is the dividend policy? Will you actually get a dividend? How will you crystalize your investment? Exit strategy?
Lots of questions!
Can the business be sucessfully scaled up or is it ideally suited to a couple of mates running from a small unit? Lots of businesses are like this. Great little businesses but not investable.
wilwak said:
I'm a chartered accountant.
For this size of business these figures will be be based upon abbreviated non-audited accounts that have been filed at Companies House.
The increases in working assets shown will be due to profits if the figures are all accurate.
A recorded increase can also be achieved by overvaluing closing stock or other assets. If they are looking to attract investment they may be inclined to paint a rosy picture of assets.
Of course it could be just a great little business. Margins can be very high on low cost items.
Are the current owners taking salaries? If not then that would eat much of the profit.
What return will you get on your investment? Will you be involved in decision making? Wil you be making a loan at a fixed return or buying equity? What is the dividend policy? Will you actually get a dividend? How will you crystalize your investment? Exit strategy?
Lots of questions!
Can the business be successfully scaled up or is it ideally suited to a couple of mates running from a small unit? Lots of businesses are like this. Great little businesses but not investable.
Having just come out of a bigger version of this I am aware of the tricks and I am sure its a case of a great little business being a terrible bigger business once you add staff, premises and the associated overheads. The love and time you dedicate to it is diluted by looking after the staff and the growing pains associated with growth and things slip, short cuts are taken and the cheapest source of x is overlooked for the easiest provider.For this size of business these figures will be be based upon abbreviated non-audited accounts that have been filed at Companies House.
The increases in working assets shown will be due to profits if the figures are all accurate.
A recorded increase can also be achieved by overvaluing closing stock or other assets. If they are looking to attract investment they may be inclined to paint a rosy picture of assets.
Of course it could be just a great little business. Margins can be very high on low cost items.
Are the current owners taking salaries? If not then that would eat much of the profit.
What return will you get on your investment? Will you be involved in decision making? Wil you be making a loan at a fixed return or buying equity? What is the dividend policy? Will you actually get a dividend? How will you crystalize your investment? Exit strategy?
Lots of questions!
Can the business be successfully scaled up or is it ideally suited to a couple of mates running from a small unit? Lots of businesses are like this. Great little businesses but not investable.
DSLiverpool said:
Can I just ask though
Is it possible to put money into a LTD company and it NOT show in liabilities ?
It wouldn't be in "liabilities" as such. It would be on the other side of the balance sheet under a heading such as Shareholders Equity or Director Loans or something.Is it possible to put money into a LTD company and it NOT show in liabilities ?
Unless you're asking "can an input of funds be hidden somewhere" - in which case nope.
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