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Why are some Financials "missing"?
Why are some Financials "missing"?

A guide on financial data (eg. turnover and R+D expenditure), where we source it, why we don't guess, and possible workarounds for this!

Updated over 3 months ago

With just over 90 different financial metrics in a company's financials tab, plenty of data can be gathered. However, not all companies will have data on every financial metric, but there are good reasons why!

A lot of it comes down to full vs abridged accounts...


Contents


Full vs Abridged Accounts

We source financial information from Companies House, and all UK private companies will file this information annually. However, the size of a company will affect the amount of information a company is obliged to disclose.


Micro-entities and small businesses can file abridged accounts if they meet at least two of the following conditions:

  • A turnover of £10.2 million or less

  • £5.1 million or less on its balance sheet

  • 50 employees or less (on average)

Medium-sized and large businesses (turnover of £10.2 million or more) will have to file full accounts, which will have deeper information than abridged accounts.

Most smaller companies will choose to file abridged accounts until they hit the £10.2 million turnover threshold. Some companies may file full accounts before reaching this size, but this is relatively rare.

What are the differences between full and abridged accounts?

In abridged accounts, you'll still find key data points like:

  • Employee Count

  • Total Assets and Liabilities / Net assets

  • Cash

  • Trade Debtors

  • Net worth

In full accounts you'll find all of the above and more, including:

  • Turnover

  • EBITDA (Earnings before Interest, Taxation, Depreciation and Amortisation)

  • Operating Profit

Key Callout: Turnover

Turnover is the most queried financial metric in Advanced Search, but is only publicly disclosed by companies filing full accounts.

Beauhurst will never guess at the turnover of a company that has not filed it - it's our way of ensuring our data is reliable and can be tracked back to a public source.

How can I work out a company's size if they don't file their turnover?

Some people will use 'industry proxies' that may help indicate a company's turnover. For example, a company's trade debtors are often between 1/4 and 1/8 of a company's turnover, meaning a search for companies with £150k-£3m in trade debtors would sometimes return companies with a turnover between £1-10m (although this will vary across different industries).

To find scaling companies, you can also try searching over recent growth in number of employees (either by absolute or percentage growth), as all companies are obliged to disclose this figure each year to Companies House.

For more information, check out our page on How to search over changes in Financial Statement filings

Beauhurst also assigns a "Stage of Evolution" for our 'tracked' companies, which outlines the company's stage of of their growth cycle. We also calculate other helpful financial figures, like pre-tax profit margin, return on capital, GVA, and company valuations (where possible) to help you assess a company's stage in the absence of turnover.


Key Callout: R+D Expenditure

R+D Expenditure is a key indication of how innovative a business is, and often how likely a business is to succeed and reach an exit event. However, not many businesses file their R+D expenditure, and if they do, many choose to file £0. As with most things, it comes down to costs...

Businesses have two choices when it comes to representing their spending on research and development in their accounting: Capitalisation or Expenditure.

Businesses that file R+D Expenditure are eligible to claim tax relief but must go through a stringent process to prove that the spending will lead to an "intended advance".

Instead of going through this lengthy process, which may end in a rejection of the tax relief claim, some businesses will choose to 'capitalise' their spending instead.

Capitalising R&D is the process a business will use to classify a research and development activity as an asset rather than an expense.
(There are conditions to do this, which you can read about on the ACCA website!)

Why Expenditure?

Why Capitalisation?

Chance to claim R+D Tax Credits

Inflates EBITDA = happy investors

Capitalising can mean higher profits, which means higher tax

Higher Valuation

R+D Tax Credit claims can be a lengthy process

Still have questions?

Reach out to your Client Experience Manager or Account Manager for further help with searching over any of these financial values. You'll find their contact details here in the Help tab!


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