B & A ROOFING AND CLADDING LTD

Executive Summary

B & A ROOFING AND CLADDING LTD is facing liquidity challenges characterized by negative working capital and zero cash reserves, risking its ability to meet short-term obligations. While fixed assets remain stable, urgent focus on cash flow management and potential financing is critical to restoring financial stability and ensuring sustainable operations.

B & A ROOFING AND CLADDING LTD - Analysis Report

Company Number: 13123600

Analysis Date: 2025-07-19 12:41 UTC

Financial Health Assessment for B & A ROOFING AND CLADDING LTD

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1. Financial Health Score: C

This company exhibits some concerning financial symptoms despite its ongoing operations. The grade C reflects a moderate risk profile with significant warning signs primarily related to liquidity and working capital management, although the company retains a positive net asset position.

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2. Key Vital Signs:

Metric	2024 Value (£)	Interpretation
Fixed Assets	29,354	Stable investment in long-term assets, unchanged from prior years — indicates some asset consistency.
Current Assets	2,235	Sharp decline from £41,182 last year, showing a significant drop in liquid and short-term assets.
Cash	£0	Zero cash on hand is a strong symptom of cash flow distress — no immediate liquid resources available.
Debtors	2,235	Reduced drastically from £35,929, possibly indicating tighter credit control or reduced sales on credit.
Current Liabilities	23,348	Substantial short-term obligations remain high, slightly improved from £37,253 last year but still large relative to assets.
Net Current Assets (Working Capital)	-21,113	Negative working capital — this is a critical symptom showing the company cannot cover its short-term debts with current assets.
Net Assets	8,241	Positive, but reduced significantly from £33,283 last year, pointing to erosion of equity and retained earnings.
Share Capital	100	Nominal capital, typical for a small private company.
Profit & Loss Reserve	8,141	Retained earnings have diminished, reflecting losses or distributions impacting reserves.

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3. Diagnosis:

The financial "vital signs" suggest B & A ROOFING AND CLADDING LTD is experiencing symptoms consistent with liquidity strain and cash flow challenges. The company's ability to meet short-term obligations is compromised, as indicated by:

• A negative net current assets (working capital) of -£21,113, implying an inability to pay off immediate debts with available liquid assets.
• A complete depletion of cash reserves, which is a critical "red flag" for operational health, since cash is the lifeblood of daily business activities.
• A sharp decline in debtors and current assets from prior years, possibly reflecting reduced sales or improved collection efforts, but not sufficient to restore liquidity.
• The reduction in net assets and reserves points to recent losses or distributions that have weakened the company’s financial cushion.

Fixed assets remain steady, indicating no recent disposals or impairment, which is positive. However, the significant current liabilities, including finance lease commitments within one year (£23,348), weigh heavily on liquidity.

This company’s financial health resembles a patient with "circulatory problems" — the core assets are intact (fixed assets), but the "blood flow" (cash and liquid assets) is severely restricted, threatening day-to-day survival if not addressed.

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4. Recommendations:

To improve financial wellness and stabilize the company’s condition, I advise the following steps:

1. Urgent Cash Flow Management:

   • Develop a detailed cash flow forecast to understand timing of inflows and outflows.
   • Negotiate extended payment terms with creditors, especially for finance leases or trade payables, to ease short-term pressure.
   • Accelerate debtor collections or consider factoring receivables to generate immediate cash.

2. Liquidity Injection:

   • Explore options for short-term financing, such as overdraft facilities or bridging loans, to restore a healthy cash buffer.
   • Consider capital injection from shareholders or new investors to strengthen equity base.

3. Cost Control and Operational Efficiency:

   • Review operational expenses to identify cost-saving opportunities without compromising service delivery.
   • Assess contract profitability and pricing strategies to improve margins.

4. Asset Utilization:

   • Evaluate underused fixed assets for potential sale or leaseback arrangements to raise cash.
   • Monitor asset depreciation policies to ensure they reflect true value and usage.

5. Financial Monitoring and Reporting:

   • Implement regular financial health checks (monthly management accounts) focusing on liquidity ratios and working capital.
   • Engage with financial advisors or turnaround specialists if cash flow problems persist.

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Executive Summary

B & A ROOFING AND CLADDING LTD currently shows signs of liquidity distress with negative working capital and no cash reserves, despite maintaining positive net assets. Immediate action on cash management, cost control, and potential financing is essential to restore financial health and secure operational continuity.