question about understanding accounts shown Companies House online

[justin44]

Just a quick question, if I view a limited company on the companies house online page I can see what is called their "Micro Company Accounts" if a value is shown in brackets e.g. (2,300) that means its a negative value correct?

so if pretty much everything shows as in (brackets) a negative value that's an indication the company is in debt right, as far as I can see 2016, 2017, 2018 all look pretty much the same.
Fixed assets >£500
everything else is (15,000) (17,000)

I guess the important one is the bottom line?
Shareholder deficit 15/16 = (3,937). 17/18=(7,778). 18/19=(13,088)

does this show that as of end financial year 18/19 the company basically owed £ 13,088 ?

many thanks

Justin44

[Dazzler]

My amateur 2c - Yes brackets are negatives, so liabilities on balance sheet, typically creditors. Problem with micro accounts is you don't get an income statement - all you see is the shareholder deficit/surplus which is the amount retained in the business. In this case it's dropping, to me that's not a good sign, I forget the rule's on dividends but it's unlikely to be running a big profit and pulling out a load of dividends.

The (13,088) means the liabilities outweigh the assets.

It's may not entirely a bad, if say it doubled and doubled it's sales again growing it's brand. But a company lives and dies on its cash flow an this sound like it has little.

I stand ready to be corrected. ;-)

[Sean89]

Dazzler has summed it up well.

In what context are you interested in these accounts. Are you going to provide them with goods and services on credit terms - if so be careful.

I’d also look at the directors. They might run other connected profitable companies so the numbers you’ve pulled out are concerning, they don’t however mean the company is definitely insolvent (bankrupt)

[33JS]

If they owe you money then it don't look good...

[justin44]

Sorry I should have been a bit more specific, my wife’s sister has just married the director this is his company. I am concerned she has married a man with debt and this was the quickest indication.

[Dazzler]

Well you're a bit late to warn her.

The limited company essentially means your losses are limited to the amount you put in. So in this case if it folded you wouldnt be liable for the £13k, (some poor trade creditor wouldn't be paid probably).

However, look out for loans on the balance sheet, if they are personally secured, secured on house etc then he may have a problem, as well as doubling down chasing success.

Just be happy for her and hope it's a great marriage.

[demonloop]

Its really difficult to glean much meaningful information from the abbreviated accounts companies can now file.

A company of mine looks terrible on paper— solvent but with a huge (98-99%) debt to equity ratio. But it’s been set up that way intentionally, and it doesn’t show the full story. People viewing the filings could be alarmed at first glance.

Obviously if a company has assets of 100k and debt of 900k that’s more clear-cut