CRAIG DHUBH LIMITED

Executive Summary

CRAIG DHUBH LIMITED currently operates with a fragile financial position characterized by very low net assets and tight liquidity, though it has improved from prior years. The company relies heavily on director loans, indicating cash flow constraints and potential vulnerability. To ensure a healthier financial future, the business should focus on strengthening liquidity, reducing dependency on internal loans, and gradually building equity to create a more robust financial foundation.

CRAIG DHUBH LIMITED - Analysis Report

Company Number: SC702642

Analysis Date: 2025-07-29 16:09 UTC

Financial Health Assessment for CRAIG DHUBH LIMITED (as of 30 June 2024)

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1. Financial Health Score: C

Explanation:
CRAIG DHUBH LIMITED demonstrates a marginally positive financial position with a very thin net asset base and net current assets just above zero. While there is improvement from negative working capital in prior years, the company remains vulnerable due to low liquidity buffers and significant director loans. The overall financial "vital signs" suggest cautious optimism but also indicate symptoms of financial fragility.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	0	No long-term assets, indicating reliance on current assets and cash flow for operations
Current Assets	87,977	Mostly short-term assets, likely cash or receivables, provides operational liquidity
Current Liabilities	86,689	Short-term debts nearly equal to current assets, indicating tight liquidity
Net Current Assets (Working Capital)	1,288	Positive but very low working capital margin; a "healthy cash flow" would be higher to buffer expenses
Net Assets (Equity)	1,288	Very small equity base; company is barely solvent with assets just covering liabilities
Director Loans (Debtors)	56,493	Large unsecured, interest-free loans to director; potential liquidity risk if repayment is delayed
Employee Count	2	Micro entity with minimal staff, possibly limiting operational scale

Interpretation:

• The company has moved from a negative working capital position in 2022 and 2023 to a slightly positive one in 2024, which suggests some improvement in managing short-term finances.
• However, the net current assets are very low, implying the company operates with a thin margin between assets and liabilities, akin to a patient with a "low blood pressure"—stable but vulnerable to shocks.
• The absence of fixed assets means no significant long-term investment cushion.
• Large director loans indicate a reliance on internal financing rather than external funding or operational cash flow, which can be a symptom of underlying cash flow constraints.

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3. Diagnosis: Financial Condition Overview

CRAIG DHUBH LIMITED shows signs of cautious recovery from prior financial strain. The company’s current assets barely cover its current liabilities, reflecting a fragile liquidity position. The presence of substantial director loans suggests the company depends on internal support to maintain operations, which is a typical symptom of financial distress or tight cash flow.

The minimal equity base ("net assets") indicates the company is operating close to insolvency thresholds, though it remains solvent at present. The lack of fixed assets points to a lean asset structure, which could limit long-term growth or collateral availability for borrowing.

Overall, the company’s financial "pulse" is weak but stable. The "symptoms" are low liquidity, dependency on director financing, and minimal equity, which demand careful monitoring and management to avoid deterioration.

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4. Recommendations: Improving Financial Wellness

1. Strengthen Liquidity:

   • Aim to increase net current assets to a more comfortable level (e.g., 10-20% above current liabilities) to build a buffer against unforeseen expenses or revenue shortfalls.
   • Monitor cash flow closely and reduce reliance on director loans where possible.

2. Reduce Director Loan Exposure:

   • Formalize repayment plans for director loans to improve transparency and reduce financial risk.
   • Explore alternative financing options such as small business loans or equity injections to diversify funding sources.

3. Build Equity Base:

   • Retain earnings where possible to gradually build shareholders’ funds and improve solvency.
   • Consider capital contributions if feasible to strengthen the balance sheet.

4. Operational Efficiency:

   • With only two employees, ensure operations are optimized for profitability, and avoid unnecessary expenses.
   • Investigate opportunities to increase revenue within the management consultancy sector (SIC 70229) to improve financial resilience.

5. Prepare for Growth or Contingencies:

   • Without fixed assets, the company may face challenges scaling. Consider strategic investments if growth opportunities arise.
   • Maintain good communication with stakeholders about financial health and plans.

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