D CALLAGHAN WS LTD

Executive Summary

D CALLAGHAN WS LTD is a young and small-scale company showing initial financial stability with a positive but narrow working capital margin. While liquidity and equity positions are adequate for its start-up phase, the company should focus on strengthening cash reserves and managing debtor collections to safeguard against cash flow risks. With prudent financial management, the company has the potential to build a healthy financial foundation.

D CALLAGHAN WS LTD - Analysis Report

Company Number: SC764120

Analysis Date: 2025-07-20 15:39 UTC

Financial Health Assessment for D CALLAGHAN WS LTD (As at 31 March 2024)

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1. Financial Health Score: C (Fair)

Explanation:
D CALLAGHAN WS LTD is a newly incorporated private limited company (incorporated March 2023) operating in the natural gas extraction sector. The financial statements cover just its first accounting period. The company shows a positive net current asset position and positive shareholders’ funds, indicating initial financial stability. However, the scale of operations is modest, with limited cash reserves and current liabilities approaching current assets. This suggests a cautious outlook with room for improvement in liquidity and working capital management typical for a start-up phase.

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2. Key Vital Signs (Core Financial Metrics):

Metric	Value (£)	Interpretation
Current Assets	9,695	Includes cash and trade debtors; relatively low but positive.
Cash at Bank	3,500	Modest cash reserve; essential for meeting immediate obligations.
Debtors (Trade Receivables)	6,195	Reflects amounts due from customers; timely collection is critical.
Current Liabilities	7,739	Short-term debts including tax and other creditors.
Net Current Assets (Working Capital)	1,956	Positive but narrow margin; indicates ability to cover short-term debts but with limited cushion.
Shareholders’ Funds (Equity)	1,956	Reflects net asset value owned by shareholders; positive sign.
Employees	Nil	No employees reported; likely owner-operated or subcontracted.
Turnover & Profitability	Not reported	First-year accounts do not show turnover or profit details.

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3. Diagnosis (What the Financial Data Reveals About Business Health):

• Liquidity & Working Capital:
  The company exhibits a "healthy but fragile" cash flow position. Net current assets are positive (£1,956), meaning current assets slightly exceed current liabilities. This is analogous to a patient whose vital signs are stable but with low reserves—able to meet immediate financial obligations but vulnerable to unexpected cash demands.

• Cash Position:
  Cash reserves of £3,500 provide some buffer, but given current liabilities of £7,739, the company relies heavily on receivables (£6,195) being collected promptly. Late payments or non-collection could cause liquidity distress.

• Leverage and Equity:
  Shareholders’ funds equal net assets, indicating no long-term debt and reliance on owner capital. This is a positive sign, showing no symptoms of financial strain from borrowings.

• Business Scale & Operations:
  No employees and limited assets suggest a micro or small enterprise operating at a start-up stage. The absence of turnover or profit data in the filing leaves the profitability and revenue trends unknown, which is typical for a first-year filing.

• Compliance and Governance:
  The company is active and compliant with filing deadlines. The sole director and significant controller is Daniel Callaghan, who holds 75-100% shares and voting rights, indicating clear ownership and decision-making authority.

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4. Recommendations (Specific Actions to Improve Financial Wellness):

1. Strengthen Cash Reserves:
   Increase cash buffer to at least cover 2-3 months of current liabilities to reduce risk of liquidity stress.

2. Enhance Debtor Management:
   Implement rigorous credit control procedures to ensure timely collection of receivables, reducing the risk of cash flow interruptions.

3. Monitor Working Capital Closely:
   Regularly review current assets and liabilities to maintain or improve net current asset position, avoiding overextension.

4. Plan for Growth:
   As operations mature, consider investing in fixed assets or hiring staff cautiously, balancing growth with financial stability.

5. Prepare Profit & Loss Tracking:
   Begin to track and report turnover and profitability regularly to diagnose operational performance and identify early signs of distress or success.

6. Seek Professional Advice:
   Engage an accountant or financial advisor periodically to ensure compliance, optimize tax position, and plan for sustainable growth.

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