D J C STRACHAN JOINERY LTD

Executive Summary

D J C Strachan Joinery Ltd is a micro-entity in the joinery installation sector showing recent improvements in liquidity and net assets after prior years of tight working capital and minimal equity. Regulatory compliance is sound with no overdue filings, and stable director leadership supports operational continuity. However, limited scale and historical cash flow constraints warrant further investigation into profitability and business sustainability before investment consideration.

D J C STRACHAN JOINERY LTD - Analysis Report

Company Number: SC655007

Analysis Date: 2025-07-20 11:44 UTC

1. Risk Rating: MEDIUM
   Justification: While the company shows improvement in net current assets for the latest financial year, prior years reflected negative working capital and very thin equity. The micro-entity scale limits data availability, and the absence of detailed profit/loss figures restricts full operational insight. The small share capital and limited fixed assets also suggest modest financial resources.

2. Key Concerns:

• Historical liquidity issues: Negative net current assets in 2021 and 2023 indicate periods of potential cash flow stress and short-term obligations exceeding current assets.
• Thin equity base: Shareholders’ funds have been minimal (ranging from £2 to £12k), implying limited capital buffer against losses or unexpected expenses.
• Limited scale and resources: Micro-entity status with only two employees and minimal fixed assets may constrain operational scalability and resilience during downturns.

3. Positive Indicators:

• Recent financial improvement: The 2024 accounts show a positive net current asset position (£8,728) and increased shareholders' funds (£12,054), signaling better short-term financial health.
• Compliance and governance: No overdue filings for accounts or confirmation statements, indicating good regulatory compliance and governance practices.
• Stable management: Directors have been consistent since incorporation, and there are no records of disqualifications or governance concerns.

4. Due Diligence Notes:

• Obtain detailed profit and loss accounts or management accounts to assess profitability, cash flow stability, and operational sustainability.
• Understand the reason behind prior years’ negative working capital and whether the recent improvement is sustainable.
• Investigate client base, contract stability, and payment terms given the joinery installation industry’s potential cash flow variability.
• Confirm any contingent liabilities or off-balance-sheet obligations that may affect solvency.
• Review directors’ business plans or forecasts to evaluate future growth and financial strategy.