A.T. MECH SERVICES LTD

Executive Summary

A.T. MECH SERVICES LTD shows strong financial growth and asset investment within two years of operation, with a healthy increase in equity and working capital. The introduction of long-term liabilities requires careful monitoring but does not currently threaten stability. With prudent debt management and enhanced cash flow oversight, the company is well-positioned for continued financial wellness.

A.T. MECH SERVICES LTD - Analysis Report

Company Number: 14431927

Analysis Date: 2025-07-20 12:52 UTC

Financial Health Assessment of A.T. MECH SERVICES LTD

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1. Financial Health Score: B

Explanation:
The company demonstrates solid growth in net assets and working capital over a short operational period since incorporation in late 2022. A healthy increase in fixed assets and strong shareholders' funds indicate good capital investment and ownership strength. However, the presence of long-term liabilities and relatively modest current asset levels for a micro-entity suggest some caution. Overall, the company is financially stable but with some signs to monitor.

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2. Key Vital Signs (Core Financial Metrics and Interpretation):

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	58,028	1,730	Significant increase suggests investment in long-term resources — positive for operational capacity.
Current Assets	48,150	26,558	Growth in liquid or short-term assets supports operational liquidity.
Current Liabilities	12,950	12,975	Stable short-term obligations, manageable relative to current assets.
Long-term Liabilities	39,765	0	New long-term liabilities raise caution but can be healthy if used for growth or asset acquisition.
Net Current Assets	35,200	13,583	Healthy working capital, indicating the company can cover short-term debts comfortably.
Net Assets / Equity	53,463	15,313	Increasing equity base reflects retained earnings and capital investment — a sign of financial strength.

Additional Notes:

• The increase in net assets (over 3 times growth) within two years is a strong positive "vital sign."
• The company is a micro-entity with a single director and one employee, indicating a lean structure.
• No overdue filings or compliance issues, which is a good operational health indicator.

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3. Diagnosis: What the Financial Data Reveals About Business Health

Healthy Cash Flow and Asset Growth:
The company’s balance sheet shows "healthy cash flow" dynamics, with current assets growing faster than liabilities. This suggests effective management of receivables, inventory, or cash reserves. The sharp rise in fixed assets indicates ongoing investment, possibly acquiring equipment or property to support business expansion or service delivery.

Symptoms of Financial Leverage:
The appearance of £39,765 in long-term liabilities in 2024, absent in 2023, introduces a symptom of increased financial leverage. While liabilities can fuel growth, they also increase risk if not matched with commensurate revenue increases or cash flow improvements.

Strong Equity Position:
The net assets and shareholders' funds demonstrate that the company is building a solid equity base, reducing insolvency risk and providing a buffer against operational fluctuations.

Micro-Entity Status and Small Scale:
The company’s size and filing under micro-entity provisions mean financial reporting is less detailed. While this limits insight into profitability and cash flows, the balance sheet indicates stable foundations.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Monitor Long-Term Debt:
   Ensure that the long-term liabilities are serviced comfortably from operating cash flows. Consider renegotiating terms if interest costs or repayment schedules become burdensome.

2. Enhance Cash Flow Tracking:
   Implement robust cash flow forecasting to anticipate liquidity needs and avoid cash crunches, especially as investment and liabilities increase.

3. Build Profitability Transparency:
   Even though micro-entity reporting is minimal, consider internal profit and loss tracking to diagnose operational efficiency and profitability, which will aid strategic decisions.

4. Plan for Growth Funding:
   If growth continues, evaluate whether further capital injections (equity or debt) are needed. Maintain a healthy balance between leveraging debt and preserving equity strength.

5. Compliance and Governance:
   Continue timely filings and maintain corporate governance standards. As the sole director and shareholder, ensure all legal duties are fulfilled to avoid regulatory issues.

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