Company Number: 13918038

Analysis Date: 2025-07-29 20:43 UTC

1. Financial Health Score: C

Explanation: The company shows positive net assets and working capital, indicating basic financial stability, but there is a noticeable decline in net assets and net current assets over the last year. The score reflects a fair but cautious financial condition—there are no immediate distress signals, but some symptoms of weakening financial strength.

2. Key Vital Signs:

• Net Current Assets (Working Capital): £23,141 (2024) down from £35,688 (2023)
  • Interpretation: The company retains positive working capital, a sign of healthy short-term liquidity, but the decline suggests tightening liquidity and potential pressure on meeting short-term obligations if the trend continues.
• Net Assets (Shareholders' Funds): £22,291 (2024) down from £34,893 (2023)
  • Interpretation: A reduction in net assets indicates either accumulated losses or distributions exceeding profits, signaling erosion of the company’s equity base.
• Current Assets: Stable around £44,000
  • Interpretation: Consistent cash, receivables, or stock levels, indicating stable asset management.
• Current Liabilities: Increased from £8,676 (2023) to £21,850 (2024)
  • Interpretation: The rising short-term liabilities could indicate increased short-term borrowing or delayed payments, a symptom that requires monitoring.
• No Audit Required: Micro-entity filing exemption means limited external scrutiny, so internal controls and accuracy should be carefully maintained.
• Employee Count: Low (2 employees including directors), typical for a micro company in the building completion sector.

3. Diagnosis: The company is currently solvent with positive net assets and working capital, reflecting a baseline healthy financial state. However, the decline in net assets and net current assets over the last year is a symptom of financial strain. The increased current liabilities relative to current assets indicate the company may be relying more on short-term credit or deferring payments, which could diminish operational flexibility. The small scale and micro entity status limit financial complexity but also reduce the buffer against adverse events. The director ownership concentration and recent director resignation may also signal changes in management dynamics or strategy.

4. Recommendations:

• Improve Cash Flow Management: Focus on accelerating receivables and controlling payables to stabilize working capital and prevent liquidity stress.
• Cost Control and Profitability: Review expense structure to halt the decline in net assets, aiming to rebuild equity through retained earnings.
• Monitor Short-Term Liabilities: Avoid over-reliance on short-term debts; negotiate longer credit terms where possible to ease immediate cash pressure.
• Strengthen Financial Reporting: Despite audit exemption, consider periodic internal financial reviews or external advisory to detect early warning signs.
• Succession and Governance: Address any management changes proactively to maintain confidence among stakeholders.
• Plan for Growth Carefully: As a micro company in building finishing, cautious scaling with attention to cash flow will be critical to avoid overextension.