Company Number: 12542119

Analysis Date: 2025-07-20 11:16 UTC

Financial Health Assessment Report
Company: CONSTRUCTION INDUSTRY ACCOUNTING LTD
Assessment Date: Post 31 March 2024 Accounts

---

1. Financial Health Score: C

Explanation:
The company’s financial position shows signs of mild distress, with a decline in net assets and negative net current assets in the latest year, which points to liquidity challenges. However, it retains positive net assets overall and stable shareholder funds, reflecting some resilience. The grade C reflects a borderline condition where immediate attention is needed but the company is not in critical danger.

---

2. Key Vital Signs:

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	5,892	8,509	Decrease indicates possible asset disposals or write-downs; less long-term asset base.
Current Assets	10,699	16,046	Shrinking current assets (cash, receivables, stock) reduces liquidity buffer.
Current Liabilities	13,720	17,930	Reduction in short-term debts but still higher than current assets, causing working capital deficit.
Net Current Assets	-3,021	-1,884	Negative working capital indicates potential cash flow strain to meet short-term obligations.
Total Assets Less Current Liabilities	2,871	6,625	Declining net assets signal weakening financial strength.
Shareholders Funds	2,871	6,625	Equity has decreased significantly, signaling retained losses or withdrawals.
Average Number of Employees	2	2	Stable workforce size, small company scale.

Interpretation of Vital Signs:

• The company is exhibiting "symptoms of distress," specifically in liquidity (negative net current assets) and declining equity base.
• Reduced fixed and current assets indicate possible tightening of resources or restructuring.
• Negative working capital is a "warning sign" akin to a patient with low blood pressure—cash inflow may not be sufficient to cover short-term outflows, risking insolvency if prolonged.
• However, stable employee numbers and no overdue filings reflect some operational stability.

---

3. Diagnosis:

CONSTRUCTION INDUSTRY ACCOUNTING LTD shows signs of financial strain primarily due to deteriorating liquidity and shrinking net assets over the past year. The company’s working capital deficit means it faces challenges in covering immediate obligations from current assets, a critical "vital sign" of financial health. The equity reduction suggests accumulated losses or capital withdrawals impacting the financial "immune system" of the business.

While not in immediate crisis (no overdue filings, no liquidation), the downward trend in key financial metrics indicates the company is in a "convalescent" phase requiring careful monitoring and intervention to avoid further decline.

---

4. Recommendations:

To restore and improve financial wellness, the company should consider:

1. Improve Liquidity:

   • Accelerate collection of receivables and optimize inventory management to boost current assets.
   • Negotiate better payment terms with creditors to reduce current liabilities or spread out payments.
   • Explore short-term financing options to cover working capital gaps if needed.

2. Strengthen Capital Base:

   • Retain profits rather than distributing dividends to rebuild shareholder equity.
   • Consider additional capital injection from shareholders or external investors to replenish net assets.

3. Cost Control and Efficiency:

   • Review operational costs to reduce unnecessary expenditures and improve cash flow.
   • Maintain workforce efficiency given the small employee base.

4. Financial Monitoring:

   • Implement regular cash flow forecasting to anticipate shortfalls and proactively manage finances.
   • Engage with financial advisors or accountants to stress test scenarios and plan for sustainable growth.

5. Strategic Review:

   • Assess business model viability under current market conditions in the financial management sector (SIC 70221).
   • Explore opportunities for diversifying services or increasing revenue streams.

---