Company Number: SC769003

Analysis Date: 2025-07-20 17:19 UTC

Financial Health Assessment: CROMBIE PLUMBING & HEATING LTD

---

1. Financial Health Score: B

Explanation:
For a company incorporated less than two years ago, Crombie Plumbing & Heating Ltd demonstrates a solid start with positive net assets, healthy working capital, and no overdue filings. The balance sheet shows a sound foundation with more assets than liabilities and shareholders’ funds that indicate retained equity. However, the presence of long-term liabilities and director advances suggests areas to monitor carefully. Hence, a grade B reflects good initial financial health with room for improvement as the company matures.

---

2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	93,564	Significant investment in long-term assets, a sign of capital commitment to operations.
Current Assets	165,647	Healthy short-term assets, including cash and receivables, providing liquidity.
Current Liabilities	103,141	Short-term debts are manageable relative to current assets.
Net Current Assets (Working Capital)	62,506	Positive working capital indicates sufficient short-term financial “breathing room.”
Total Assets Less Current Liabilities	156,070	Shows total resources after covering short-term obligations.
Long-term Liabilities	54,068	Long-term debts require monitoring but are balanced by asset base.
Net Assets / Shareholders’ Funds	100,122	Positive equity; company’s net worth is solid for its age.
Average Employees	16	Moderate workforce size for a micro-entity, indicating operational scale.
Director Loans Advances	-6,618	Directors have advanced funds to the company, which supports cash flow but also indicates reliance on insider funding.

---

3. Diagnosis: Financial Health of Crombie Plumbing & Heating Ltd

• Healthy Cash Flow Base: The company’s current assets comfortably exceed current liabilities, showing a “healthy pulse” in liquidity. This means it can meet short-term obligations without stress—a vital sign of financial stability.
• Strong Asset Foundation: Investment in fixed assets shows commitment to the business infrastructure, a positive indicator of long-term operational capacity.
• Positive Equity Position: Net assets exceeding £100k in the first year is commendable, indicating the business is funded well above its liabilities.
• Moderate Leverage: The presence of long-term liabilities (around £54k) is not alarming given the asset base but must be managed prudently to avoid financial strain as the company grows.
• Director Advances as Support: The directors have provided loans to the business, which can be viewed as “financial support injections,” but suggests that external financing or operational cash flow is still developing.
• No Overdue Filings: Compliance with filing deadlines signals good governance and reduces regulatory risk.
• Micro-entity Status: The company qualifies as a micro-entity, benefiting from simplified reporting but should be mindful of growth-related changes that will affect future reporting requirements.

Symptoms of distress are minimal at this stage, but the company should remain vigilant about managing liabilities and developing sustainable external cash flow sources.

---

4. Recommendations: Enhancing Financial Wellness

• Improve Cash Flow Management: Continue building a robust cash flow cycle from operations to reduce reliance on director advances. Implement strict debtor management and timely billing.
• Monitor and Manage Debt: Develop a plan to service and reduce long-term liabilities prudently to avoid liquidity stress as the company grows.
• Build Profit Reserves: Focus on generating profits to increase retained earnings and strengthen shareholders’ funds, which act as a financial buffer.
• Plan for Growth: As the company expands beyond micro-entity thresholds, prepare for increased filing and audit requirements, ensuring accounting systems are scalable.
• Governance and Reporting: Maintain timely filings and transparent communication with directors and stakeholders to uphold confidence and legal compliance.
• Explore Financing Options: Consider external financing options for capital needs to diversify funding sources and reduce director loan dependence.

---