ACM SOUTH CONSTRUCTION LTD

Executive Summary

ACM SOUTH CONSTRUCTION LTD exhibits a fragile financial condition typical of a micro-entity with minimal equity and working capital. While not in immediate distress, the company’s financial “vital signs” indicate limited capacity for growth or absorbing shocks. Strengthening capital reserves and improving cash flow management are essential next steps to ensure long-term financial wellness.

ACM SOUTH CONSTRUCTION LTD - Analysis Report

Company Number: 13639298

Analysis Date: 2025-07-29 13:15 UTC

Financial Health Assessment of ACM SOUTH CONSTRUCTION LTD

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1. Financial Health Score: D

Explanation:
The company shows very limited net assets (£58) and minimal working capital (£1,258) for a micro-entity in the construction sector. While it is meeting its obligations and not in distress, the financial position is fragile with very low equity buffers and negligible growth over the past two years. This grade reflects a borderline financial condition needing strengthening for future stability.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Current Assets	£2,934	Very low cash and short-term assets; minimal liquidity available.
Current Liabilities	£1,676	Short-term obligations are low but significant relative to assets.
Net Current Assets (Working Capital)	£1,258	Positive but minimal working capital; “healthy cash flow” is fragile and may limit operations.
Net Assets / Shareholders' Funds	£58	Extremely thin equity; indicates minimal financial cushion against losses or shocks.
Employee Count	1	Sole operator or very small team, consistent with micro-entity status.
Consistency of Financials	Stable	Financials have remained almost unchanged over 3 years, indicating no growth or reinvestment.

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3. Diagnosis: Financial Condition Overview

ACM SOUTH CONSTRUCTION LTD is currently functioning with the financial vitality typical of a very small start-up or micro-business in the construction sector. The company's "vital signs" show it has just enough resources to cover short-term debts, but its extremely low net assets (equity) are a symptom of limited retained earnings or capital injection.

The stability of the numbers over the past two years, without growth in assets or equity, suggests the business is not expanding or reinvesting profits. This could reflect either a conservative approach or an inability to generate higher returns. The minimal working capital means there is little buffer to absorb unexpected costs or delays in payment from clients, typical stress points in construction.

With only one employee (presumably the director), the business is highly dependent on a single individual’s effort and financial input, which adds operational risk.

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4. Recommendations

1. Increase Capital or Retained Earnings:
   Consider capital injection or improving profit margins to build a stronger equity base. A thicker “financial skin” helps absorb shocks and supports growth.

2. Enhance Working Capital Management:
   Improve cash flow through better debtor management or negotiating longer payment terms with suppliers to increase liquidity.

3. Expand Revenue Streams:
   Explore opportunities to increase turnover, which may allow reinvestment into the business and reduce financial fragility.

4. Financial Monitoring:
   Implement regular financial reviews to detect early symptoms of distress. Use simple cash flow forecasting to avoid liquidity crunches.

5. Risk Mitigation:
   Develop contingency plans for operational risks, especially given the reliance on a single employee/director.

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