D C TILE MASTERS LTD

Executive Summary

D C TILE MASTERS LTD maintains a modestly positive net worth but exhibits recurring negative working capital, indicating mild liquidity stress that could affect short-term financial health. Strengthening cash flow management and working capital will be key to ensuring ongoing stability. The company remains compliant and operational, but proactive financial planning is advised to improve resilience.

D C TILE MASTERS LTD - Analysis Report

Company Number: 14262126

Analysis Date: 2025-07-29 21:00 UTC

Financial Health Assessment for D C TILE MASTERS LTD
Assessment Date: Financial Year Ending 31 July 2024

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1. Financial Health Score: C

Explanation:
The company shows modest positive net assets and shareholder funds, indicating a basic level of financial stability. However, recurring negative net current assets (working capital deficits) for consecutive years suggest ongoing liquidity stress. The scale of operations is small (micro entity), and while there is no overdue filing, the company’s cash flow and short-term financial flexibility reflect symptoms of mild financial strain.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£3,263	Small asset base, typical for a micro company.
Current Assets	£4,487	Slight increase from prior year; limited cash/resources for short-term needs.
Current Liabilities	£4,772	Slight increase from prior year; obligations due within 1 year.
Net Current Assets	-£285	Negative working capital indicates potential short-term liquidity issues ("symptom of distress").
Total Assets less Current Liabilities	£2,978	Positive but marginal buffer after covering short-term debts.
Shareholders’ Funds	£2,978	Equity capital remains stable, showing no erosion in net worth.
Average Employees	3	Small workforce, appropriate for micro category.
Director’s Loan Account	-£57	Small outstanding balance owed to director, manageable but requires monitoring.

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3. Diagnosis

The company is in a stable but fragile financial state. The positive shareholders’ funds and total assets less current liabilities show that the company’s “heart”—its net worth—is healthy but small. However, the “circulatory system” (working capital) is under strain due to negative net current assets, which means the company may struggle to meet short-term obligations without additional cash inflows or financing.

The increase in current assets is a positive sign, suggesting some improvement in liquidity, but it remains insufficient to fully cover short-term liabilities, representing a mild but persistent symptom of financial stress. The fixed asset base is minimal, indicating limited investment in long-term resources, typical for the industry and company size.

The director’s loan remains small but growing, which could indicate reliance on personal funds to support operations—potentially a sign of cash flow challenges. The company remains compliant with filing deadlines and is not under any administration or liquidation proceedings, which is a positive sign.

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4. Recommendations

• Improve Working Capital Management:
  Focus on accelerating collections, managing payables, and controlling inventory (if applicable) to convert negative net current assets into a positive position. This will ensure healthier cash flow and reduce liquidity risk.

• Monitor Cash Flow Regularly:
  Establish a cash flow forecast to anticipate periods of tight liquidity and plan financing or cost-cutting measures proactively.

• Consider Short-Term Financing:
  If working capital issues persist, explore short-term credit facilities or director loans structured formally to bridge liquidity gaps without jeopardizing operations.

• Strengthen Financial Reserves:
  Retain earnings where possible to build equity and provide a buffer against future financial shocks.

• Operational Efficiency:
  Review cost structure and operational processes to improve margins, given the small asset base and workforce.

• Director’s Loan Transparency:
  Regularly review and formalize director advances to avoid governance issues and ensure clarity for all stakeholders.

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