ACUMEN MECHANICAL ELECTRICAL CONSTRUCTION LTD

Executive Summary

ACUMEN MECHANICAL ELECTRICAL CONSTRUCTION LTD shows a sound financial condition with strong liquidity and improving net assets, indicative of healthy operational cash flow and growth. The main caution lies in managing increasing long-term liabilities and concentrated control. With attentive financial management and strategic planning, the company is well-positioned for a stable and positive financial future.

ACUMEN MECHANICAL ELECTRICAL CONSTRUCTION LTD - Analysis Report

Company Number: 12840410

Analysis Date: 2025-07-19 12:25 UTC

Comprehensive Financial Health Assessment: ACUMEN MECHANICAL ELECTRICAL CONSTRUCTION LTD

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1. Financial Health Score: B

Explanation:
The company demonstrates a solid and improving financial position with healthy liquidity and growing net assets. However, certain symptoms such as rising long-term liabilities and concentration of control suggest cautious monitoring. The rating "B" reflects a generally healthy financial status with room for improvement to reach optimal robustness.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Current Assets	161,648	Indicates good short-term resources available to meet obligations.
Cash Reserves	106,515	Strong cash position, resembling a healthy pulse in cash flow.
Debtors	55,133	Moderate level of receivables; manageable but requires collection focus.
Current Liabilities	107,459	Payables slightly exceed short-term current assets, but net current assets positive.
Net Current Assets (Working Capital)	54,189	Positive working capital is a good sign of liquidity health.
Net Assets (Equity)	36,928	Growing net assets indicate building company value and retained earnings.
Long-term Liabilities	43,699	Increased long-term debt (hire purchase & other creditors), a symptom to watch.
Share Capital	3	Minimal paid-in equity, typical for small private companies.
Employee Count	3	Small team, likely focused and specialized.

Additional Observations:

• Asset Base: Tangible fixed assets around £32,639 are steady, supporting operational needs.
• Directors and Control: Concentrated ownership and control by a few individuals with significant influence on decision-making.
• Filing Status: Up-to-date filings, no overdue accounts or confirmation statements, indicating compliance and regulatory health.

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3. Diagnosis

Vital Signs Summary:
The company’s financial pulse appears stable and improving. Cash flow is strong with a sizeable cash buffer, which is crucial for meeting immediate payment demands and unexpected expenses—a "healthy cash flow" sign. Positive net current assets demonstrate the company’s ability to cover short-term liabilities comfortably.

Symptoms Analysis:

• The notable rise in long-term liabilities, particularly hire purchase contracts and other creditors, indicates some reliance on external financing. This could be a strategic move to support growth or a potential stress point if cash flows fluctuate.
• Trade creditors have increased substantially, which could reflect expansion or delayed payments—this requires careful monitoring to prevent supplier relationship strain.
• The company has a modest equity base but growing retained earnings, suggesting profitable operations that retain earnings to strengthen the balance sheet.
• The small workforce and specialized SIC code (plumbing, heat and air-conditioning installation) indicate a niche, possibly bespoke, service provider.

Underlying Business Health:
The company seems to be in a growth phase, balancing investment in fixed assets and managing increasing liabilities. Its financial statements suggest it is solvent, with no immediate distress signals such as negative net assets or liquidity crunches. The governance structure with key individuals controlling significant shares aligns with a focused management approach but may also pose risks if key personnel changes occur.

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4. Recommendations

1. Monitor Long-Term Debt:
   The increased long-term liabilities (hire purchase and other creditors) should be tracked closely. Ensuring that repayment schedules align with cash flow forecasts will mitigate risk of over-leverage. Consider negotiating better terms or exploring alternative financing if costs rise.

2. Strengthen Receivables Management:
   While debtors are manageable, improving collection processes can enhance liquidity further and reduce the risk of bad debts. Implement stricter credit control and timely invoicing.

3. Optimize Working Capital:
   Maintain the positive net current assets by balancing inventory, receivables, and payables. Avoid stretching trade creditors excessively to maintain supplier trust.

4. Diversify Ownership Risk:
   Given the concentrated shareholding and control, consider succession planning or expanding the shareholder base to distribute governance risk and enhance strategic input.

5. Continue Compliance Discipline:
   Keep up with timely filing and regulatory compliance to avoid penalties and maintain credibility with stakeholders.

6. Evaluate Profitability and Growth:
   As profit and loss details are not disclosed, focus on internal profitability metrics. Seek to improve margins and operational efficiency as the business scales.

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