AD HIRE LTD

Executive Summary

AD HIRE LTD shows promising financial health with a solid cash position, positive net assets, and manageable liabilities, indicating stable and growing operations. The company is financially sound but should continue careful cash flow management and creditor control to maintain liquidity and support future growth.

AD HIRE LTD - Analysis Report

Company Number: 13422379

Analysis Date: 2025-07-29 19:50 UTC

Financial Health Assessment of AD HIRE LTD as of 31 May 2024

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1. Financial Health Score: B

Explanation:
AD HIRE LTD shows a solid improvement trajectory from its initial years, with a positive net asset position and healthy working capital. The company has maintained positive shareholder funds and a growing cash balance, which are signs of financial stability. However, given the small scale and relatively modest asset base, the company is still in an early growth phase and should monitor liabilities and cash flow carefully to avoid potential liquidity strains.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	9,770	Reflects the company's short-term resources, including cash and receivables, sufficient to cover liabilities.
Cash Balance	8,816	Strong cash position, indicating good liquidity and ability to meet immediate obligations.
Current Liabilities	4,133	Obligations due within one year; manageable relative to current assets but requires monitoring.
Net Current Assets	5,637	Positive working capital, a vital sign of healthy day-to-day operations and liquidity.
Shareholders’ Funds	5,637	Equity backing demonstrates that the company has a positive net worth, a good sign of financial strength.
Share Capital	100	Nominal share capital; company is primarily financed through retained earnings or shareholder loans.
Number of Employees	2	Small workforce consistent with a micro or small business profile.

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3. Diagnosis: Financial Health Overview

AD HIRE LTD presents the financial "vital signs" of a company emerging from its start-up phase with a stable balance sheet and improving liquidity position. The cash balance has grown significantly over the last year, creating a "healthy cash flow" environment that allows the company to comfortably cover its current liabilities. The increase in debtors indicates growing sales or customer base, while current liabilities have appeared this year, reflecting new trade creditors and tax/social security obligations.

The company is maintaining a positive net current asset position, which shows no immediate liquidity distress—this is akin to a healthy pulse indicating the business can meet short-term obligations without stress. The retained earnings accumulation suggests profitable operations or capital injections, contributing to shareholders' funds.

However, the company’s small scale and modest asset base mean it remains vulnerable to shocks and should be cautious about increasing liabilities or overextending credit. The presence of tax and social security liabilities requires careful cash flow management to avoid any compliance or financial strain symptoms.

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4. Recommendations: Steps to Improve Financial Wellness

• Maintain Strong Cash Management: Continue to monitor and forecast cash flow closely to ensure the company can meet tax and creditor payments on time, preventing liquidity "symptoms" like late payments or penalties.

• Manage Creditors and Debtors Efficiently: Implement robust credit control to keep debtor days low and negotiate favorable payment terms with suppliers to optimize working capital.

• Build Financial Buffers: Consider building a cash reserve or securing a credit facility to cushion against unexpected expenses or downturns, akin to a financial immunity booster.

• Regular Financial Reviews: Schedule periodic financial health check-ups to track key metrics such as current ratio, quick ratio, and profitability trends. Early detection of any distress signals can allow prompt corrective action.

• Strategic Growth Planning: As the company grows, plan for scaling operations, including potential capital investments or funding rounds, ensuring that financial structure remains sound.

• Compliance Vigilance: Stay current with all filing and tax obligations to avoid penalties that can weaken financial health.

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