Company Number: 12847141

Analysis Date: 2025-07-20 15:28 UTC

Financial Health Assessment of D HARRIS ROOFING SERVICES LIMITED

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1. Financial Health Score: B

Explanation:
The company shows consistent positive net current assets and net assets over the last five years, indicating a stable financial footing. The modest but steady increase in working capital suggests healthy liquidity for a micro-entity. However, the scale of operations and limited equity base (share capital of only £100) restrain the score from being higher. Overall, the company is financially sound but operating on a small scale with limited buffer for shocks.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£26,770	Represents cash, receivables, and stock available to cover short-term obligations; showing growth.
Current Liabilities	£22,147	Short-term debts; manageable relative to current assets.
Net Current Assets (Working Capital)	£4,623	Positive and increasing, indicating the company can meet short-term liabilities comfortably.
Net Assets (Equity)	£4,623	Positive and stable, demonstrating retained earnings or capital build-up over time.
Share Capital	£100	Minimal initial equity; most capital growth likely from retained profits.
Employee Count	1	Sole director and employee, indicating a micro-business setup.

Interpretation:
The company’s "vital signs" reflect a small but financially healthy business with sufficient liquidity to cover immediate debts. The steady net assets growth over five years is a sign of prudent financial management and profitability, even if modest. The small scale, indicated by only one employee and micro-entity status, means the company is vulnerable to market or operational shocks but currently showing no distress.

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3. Diagnosis: Financial Condition

• Liquidity: The company maintains a healthy cash flow position, as shown by positive net current assets, which is essential for day-to-day operations. This reduces symptoms of financial stress such as inability to pay creditors or meet payroll.

• Solvency: Positive net assets indicate the company is solvent with equity exceeding liabilities. This is a strong sign of financial health, especially given the micro-entity status.

• Growth & Stability: Gradual increase in current assets and net assets over the years signals stable growth. The company does not exhibit symptoms of rapid expansion or contraction, suggesting a steady business model.

• Capital Structure: Extremely low share capital means the company’s equity base is mainly built from retained earnings rather than investor funds. This limits the ability to raise capital quickly but also reduces financial risk from debt or external equity.

• Operational Scale: With only one employee (the director), the company functions as a sole proprietorship in corporate form. This limits operational capacity but keeps overheads low.

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4. Recommendations: Financial Wellness Actions

1. Maintain Cash Reserves: Continue to monitor liquidity closely to maintain healthy working capital. This helps avoid symptoms like cash flow crunches that can quickly destabilize a small business.

2. Consider Capital Injection: To support potential growth or absorb shocks, consider increasing share capital or securing small business financing. This strengthens the equity base and improves solvency buffer.

3. Financial Planning: Implement simple budgeting and cash flow forecasting to anticipate seasonal fluctuations or unexpected expenses.

4. Diversify Revenue Streams: To reduce risk of income volatility, explore opportunities for expanding roofing services or related offerings.

5. Compliance and Reporting: Keep up with timely filing of accounts and confirmation statements to avoid penalties and maintain good standing.

6. Succession and Risk Planning: Given the sole director structure, consider contingency plans for continuity in case of absence or incapacity, such as appointing a secondary director.

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