APEX CANOPIES LIMITED

Executive Summary

Apex Canopies Limited exhibits strong financial health with robust liquidity and growing equity, signaling a healthy financial "heartbeat." The company should focus on managing debtor collections and creditor payments to maintain smooth cash flow and sustain growth. With careful financial stewardship, the outlook remains positive for continued business stability and expansion.

APEX CANOPIES LIMITED - Analysis Report

Company Number: 12788254

Analysis Date: 2025-07-19 11:53 UTC

Financial Health Assessment for Apex Canopies Limited

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1. Financial Health Score: B

Explanation:
Apex Canopies Limited demonstrates a generally sound financial position with strong growth in net current assets and shareholders' funds over recent periods. The company maintains healthy liquidity, evidenced by a strong cash balance relative to short-term liabilities. However, increased creditors, especially corporation tax and other taxes, indicate potential short-term cash flow pressures that require careful management. The score B reflects good financial health with some cautionary signs to monitor.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£153,242	Significantly increased, showing improved liquidity and asset base.
Cash Balance	£76,269	Healthy cash reserves, more than covering current liabilities, indicating strong cash flow.
Debtors	£76,973	Large increase in trade debtors, which could indicate strong sales or delayed customer payments.
Current Liabilities	£79,392	Increased liabilities, mainly trade creditors and tax obligations; requires monitoring.
Net Current Assets (Working Capital)	£73,850	Strong positive working capital, indicating good short-term financial health.
Shareholders’ Funds	£74,730	Substantial growth from £24,088 in 2023, reflecting retained earnings and financial strength.
Tangible Fixed Assets	£880	Minimal fixed assets, typical for a small joinery installation business.
Employees	2	Small workforce, consistent with micro/small company classification.

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3. Diagnosis: Financial Symptoms and Analysis

• Healthy Cash Flow: The company’s cash balance (£76,269) exceeds current liabilities (£79,392) by a small margin, indicating an overall liquid position with a healthy "cash pulse." This is a vital sign that the company can meet short-term obligations without distress.

• Growth in Working Capital: The net current assets have grown from £23,998 in 2023 to £73,850 in 2024, showing a robust improvement in short-term financial health and operational efficiency.

• Increasing Debtors and Creditors: The significant rise in trade debtors (£76,973 from £17,798) suggests higher sales or delayed collections. Similarly, trade creditors have risen sharply (£42,469 from £256), possibly indicating stretched payment terms with suppliers or increased purchasing activity.

• Tax Liabilities: Corporation tax and other taxation liabilities have increased (£25,850 and £9,924 respectively), suggesting tax payments due. This could be a symptom of profitability but requires careful liquidity management to avoid cash flow strain.

• Stable Asset Base: The company’s tangible assets remain small (£880), indicating a low capital intensity business model which limits fixed asset risks but relies heavily on effective working capital management.

• Equity Increase: The rise in shareholders’ funds from £24,088 to £74,730 is a positive symptom of retained profits and financial resilience, which strengthens the company’s balance sheet "immune system."

• Small Employee Base: With only two employees, the company is lean but may have limited capacity for scaling without additional hires.

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4. Prognosis: Future Financial Outlook

Current indicators suggest Apex Canopies Limited is in a stable and growing phase, with strong liquidity and increasing equity base. However, the company should monitor debtor days and creditor terms closely to avoid cash flow "blockages" that could impair operational fluidity. Tax liabilities will need timely settlement to prevent penalties and preserve financial health.

With prudent working capital management and steady sales growth, the prognosis is positive, anticipating continued financial stability and potential for expansion. However, reliance on a small team and increases in trade payables may require attention to maintain this trajectory.

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5. Recommendations: Steps to Enhance Financial Wellness

• Improve Debtor Collection: Implement or tighten credit control procedures to accelerate debtor collections and reduce the risk of bad debts, thereby improving cash flow.

• Manage Creditors Proactively: Negotiate favorable payment terms with suppliers to balance cash outflows without damaging supplier relationships.

• Plan for Tax Payments: Set aside funds systematically for corporation tax and other liabilities to avoid cash flow shocks at payment deadlines.

• Monitor Cash Flow Regularly: Maintain rolling cash flow forecasts to spot liquidity pressure symptoms early and take corrective action.

• Consider Growth Capacity: Evaluate workforce capacity and operational efficiency to support future growth without overextending resources.

• Review Fixed Asset Needs: Although fixed assets are minimal, periodic review of asset utilization and investment can support operational improvements.

• Maintain Compliance: Ensure timely filing of accounts and confirmation statements to avoid regulatory penalties and maintain good standing.

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