I’m ACCA qualified but I work as a Management Accountant in the NHS so not my area of expertise but for what it’s worth…..Ooh please can you give us your thoughts on their accounts? I’m L3 AAT so limited companies is not something I’ve covered much of yet so interpreting statements is still a learning curve
- The intangible asset valuation seems very high to me and is based on the cost of app development less amortisation in the year. It’s more a means of reporting the cost of something over its lifespan rather than saying the thing is actually worth £530k. It might have cost that much but chances are you couldn’t sell it for that much.
- The amount of money in the bank is small, £11.8k, and does not even remotely cover what they owe to their creditors (suppliers), £338.6k. They are owed just over £12k so even if everyone paid up they still would not have enough in the bank to pay their debts. Their liquidity is poor.
- It would be interesting to know who their creditors are. It wouldn’t surprise me if some of them are other Louise businesses.
- It’s just the balance sheet so can’t see their turnover, sales, expenses etc. That would give a better idea of how well the business is doing.