D W B MECHANICAL SERVICES LTD

Executive Summary

D W B MECHANICAL SERVICES LTD exhibits stable but fragile financial health typical of a micro-entity, with strong fixed assets but concerning liquidity issues evidenced by negative working capital. Immediate focus on improving cash flow and managing liabilities is essential to avoid financial distress. With targeted actions on liquidity and operational efficiency, the company can strengthen its financial resilience and support sustainable growth.

D W B MECHANICAL SERVICES LTD - Analysis Report

Company Number: 12480779

Analysis Date: 2025-07-20 11:51 UTC

Financial Health Assessment Report: D W B MECHANICAL SERVICES LTD

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1. Financial Health Score: Grade C

Explanation: The company demonstrates a stable but modest financial position typical of a micro-entity in its early years. While it maintains positive net assets and shareholders' funds, there are signs of liquidity strain and increased long-term liabilities. The financial "pulse" is steady but shows some symptoms that warrant monitoring and remedial action to avoid future distress.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£24,004	Investment in long-term assets has increased, indicating capacity growth or asset acquisition.
Current Assets	£4,214	Significant drop from prior £14,600, indicating reduced short-term liquidity ("cash flow pulse").
Current Liabilities	£13,456	Increased liabilities due within one year, potentially pressuring working capital.
Net Current Assets (Working Capital)	-£9,242	Negative value signals a liquidity "symptom of distress" — current obligations exceed assets.
Creditors Due After One Year	£11,974	High long-term liabilities relative to company size; suggests leveraged financing or deferred debts.
Net Assets / Shareholders’ Funds	£2,788	Positive but low net worth, showing limited equity buffer against financial shocks.
Employee Count	1	Very small workforce consistent with micro-entity status; limited human resource risk.

Vital Signs Interpretation:
The company's "heart" shows a good level of fixed assets, which reflects investment in operational capacity. However, the sharp decline in current assets and resulting negative working capital indicate a "circulatory" issue—insufficient liquid resources to cover short-term debts. This liquidity strain is a key symptom of financial stress that should be addressed promptly to avoid "organ failure" in business terms (i.e., insolvency risks).

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3. Diagnosis

D W B MECHANICAL SERVICES LTD presents as a micro-sized private limited company engaged in motor vehicle maintenance and repair. Its financial statements reveal:

• A healthy asset base growth in fixed assets, suggesting investment in plant or equipment.
• A significant deterioration in current asset liquidity from £14,600 to £4,214, while current liabilities have simultaneously increased.
• The negative working capital (-£9,242) is a crucial symptom indicating cash flow challenges; the company may struggle to meet immediate financial obligations without external support or operational cash inflows.
• Long-term creditors remain high, which could reflect loans or deferred payments, adding financial leverage risk.
• Net assets remain positive but with a very slim equity margin, limiting the company’s financial resilience.
• The single employee count aligns with the micro-entity profile but also points to a potentially limited operational scale and dependency on owner/director involvement.

In medical analogy terms, the company’s financial "vital signs" show a stable but weakened "cardiovascular system"—while the "structural" assets (fixed assets) are robust, the "blood flow" (liquidity) is compromised, posing a risk for operational disruptions if not corrected.

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4. Recommendations

To improve financial wellness and strengthen the company’s financial health, the following actions are advised:

• Enhance Liquidity Management:

  • Accelerate debtor collections and review payment terms with customers to improve cash inflows.
  • Negotiate extended payment terms with suppliers or restructure short-term creditors to ease immediate cash flow pressure.

• Cost Control and Operational Efficiency:

  • Review and optimize operational expenses to preserve cash without compromising service quality.
  • Consider whether asset utilization can be improved to generate additional revenue or cost savings.

• Debt Restructuring:

  • Explore options to refinance or restructure long-term liabilities to reduce interest burden and improve cash flow flexibility.

• Financial Planning and Monitoring:

  • Implement regular cash flow forecasting to anticipate liquidity issues early and plan accordingly.
  • Maintain a contingency cash reserve where possible to buffer against unforeseen demands.

• Growth and Revenue Strategy:

  • Evaluate potential for business development or diversification to increase turnover and improve profitability, thereby enhancing shareholders’ equity over time.

• Director Involvement:

  • Given the company’s small size and single director structure, ensure active oversight and engagement in financial decision-making to respond swiftly to emerging issues.

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