BARAN CONTRACTS LTD

Executive Summary

BARAN CONTRACTS LTD demonstrates a strong and improving financial position with robust working capital and growing net assets. The company’s financial health is generally sound, though attention should be given to managing long-term liabilities and operational structure to sustain future growth. With prudent financial management, the outlook remains positive for continued stability and expansion.

BARAN CONTRACTS LTD - Analysis Report

Company Number: SC682912

Analysis Date: 2025-07-29 18:36 UTC

Financial Health Assessment for BARAN CONTRACTS LTD

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1. Financial Health Score: B

Explanation:
BARAN CONTRACTS LTD exhibits a solid and improving financial position with strong net asset growth and healthy working capital. The company operates within the micro-account category, which typically has simpler financial structures. While there are no red flags indicating distress, some caution is warranted due to the presence of long-term creditors and zero reported employees impacting operational scale.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Net Assets	200,124	Significant increase from £97,060 in 2022; indicates growing equity and financial strength.
Net Current Assets (Working Capital)	251,806	Strong positive working capital, showing the company can comfortably cover short-term debts.
Current Liabilities	-121,974	Increase in short-term obligations; manageable given high current assets.
Creditors > 1 Year (Long-term liabilities)	61,500	Non-trivial long-term debt; requires monitoring for repayments and cash flow impact.
Fixed Assets	9,818	Small fixed asset base, typical for a micro entity in construction installation.
Share Capital	2.00	Nominal share capital, minimal impact on financial stability.
Average Employees	0	No employees reported; may indicate reliance on subcontractors or directors themselves.

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3. Diagnosis: What the Financial Data Reveals

• Healthy Cash Flow Indicators: The company’s strong net current assets signal a "healthy cash flow pulse," meaning it likely has sufficient liquid resources to meet short-term obligations without strain. This is a positive sign of operational liquidity and efficiency.

• Growth in Financial Strength: Doubling of net assets from 2022 to 2023 suggests good profitability or capital injection, strengthening the company’s financial "immune system."

• Long-Term Debt Consideration: The presence of £61,500 in creditors due after one year is a symptom that the company carries some financial leverage. While not alarming by itself, it requires prudent management to avoid future liquidity challenges.

• Operational Scale: The absence of reported employees hints at a lean operational model, possibly subcontracting work or director-led operations. This could mean low fixed overheads but also potential risks if reliant on few key personnel.

• Sector Context: Operating in "Other construction installation" (SIC 43290), a sector often characterized by project-based work and variable cash flows, the company’s strong working capital is reassuring.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Monitor Long-Term Debt: Develop a clear repayment and refinancing plan for the £61,500 long-term creditors to avoid future financial strain.

• Enhance Cash Flow Forecasting: Maintain rigorous cash flow management to ensure ongoing liquidity, especially given the cyclical nature of construction work.

• Consider Employee Structure: Evaluate whether employing staff or formalizing subcontractor agreements can improve operational stability and business scalability.

• Build Capital Reserves: Continue growing retained earnings and reserves to buffer against business cycle downturns or unexpected expenses.

• Regular Financial Reviews: Conduct periodic financial health check-ups to detect early warning signs ("symptoms") of distress and adjust strategy proactively.

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