Understanding Company Accounts on Companies House

Every UK company must file accounts at Companies House, but the level of detail varies enormously depending on the company's size. Understanding what's available - and what's missing - is key to effective company research.

Types of Company Accounts

Micro-Entity Accounts

The smallest companies (turnover under £632,000, balance sheet under £316,000, fewer than 10 employees) can file heavily abbreviated accounts containing just:

• A very basic balance sheet
• A few notes

There is no profit and loss account and no turnover figure. This makes financial analysis extremely limited.

Small Company Accounts

Small companies (turnover under £10.2 million, balance sheet under £5.1 million, fewer than 50 employees) can file abridged accounts. These include:

• Balance sheet with more detail than micro-entity accounts
• Notes to the accounts
• Still no P&L or turnover required at Companies House (though they must prepare full accounts for shareholders)

Medium Company Accounts

Medium companies can file slightly abbreviated accounts but must include a profit and loss account (though they can start from gross profit rather than showing turnover).

Full Accounts (Large Companies)

Large companies must file complete accounts including:

• Full balance sheet
• Profit and loss account with turnover
• Cash flow statement
• Directors' report
• Detailed notes
• Auditor's report

How to Read a Balance Sheet

Even from abbreviated accounts, the balance sheet reveals useful information:

• Net assets: Total assets minus total liabilities. A negative figure means the company's liabilities exceed its assets - a warning sign
• Cash at bank: How much cash the company holds. Low cash relative to current liabilities suggests potential cashflow problems
• Creditors due within one year: Money owed in the short term. Compare this to current assets to assess liquidity
• Creditors due after one year: Long-term debt. High levels may indicate the company is heavily leveraged
• Share capital and reserves: Shows how the company has been funded and its accumulated profits or losses

Filing Deadlines

Companies must file accounts within:

• 9 months of the accounting reference date for private companies
• 6 months for public companies

Late filing incurs automatic penalties ranging from £150 (up to 1 month late) to £1,500 (more than 6 months late) for private companies, and double these amounts for public companies.

A company that consistently files late may be disorganised or in financial difficulty. Companies House marks overdue accounts on the company record.

What Accounts Don't Tell You

Even full accounts have limitations:

• They're historical: By the time accounts are filed, they can be up to 21 months old (12-month accounting period + 9-month filing deadline)
• They can be window-dressed: Companies can time transactions to improve the balance sheet at the reporting date
• No customer or supplier detail: You won't see who the company trades with
• Management accounts differ: The company's internal financial picture may look very different from the statutory accounts

Using Accounts in Research

When researching a company through NewcoHunter or Companies House:

1. Check the filing history - are accounts filed on time?
2. Compare year-on-year - is the balance sheet growing or shrinking?
3. Look at the accounting reference date - has it been changed recently? (This can be used to delay filing)
4. Check the auditor's report (if applicable) - any qualifications or going concern notes?