DALLINGTON ENERGY LTD

Executive Summary

DALLINGTON ENERGY LTD is financially stable with strong liquidity and positive net assets, reflecting good short-term health and solvency. The company shows minor signs of operational strain through increased current liabilities and a slight decrease in net assets, which should be monitored closely. With focused cash flow management and profitability measures, the company can maintain and improve its financial wellness as it grows.

DALLINGTON ENERGY LTD - Analysis Report

Company Number: 14330357

Analysis Date: 2025-07-29 20:50 UTC

Financial Health Assessment: DALLINGTON ENERGY LTD

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1. Financial Health Score: B

Explanation:
DALLINGTON ENERGY LTD shows stable financial footing for a young company incorporated in 2022, with positive net assets, a healthy cushion of net current assets, and solid cash reserves relative to liabilities. The score "B" reflects good liquidity and solvency but with signs of mild tightening in working capital and a slight decline in net assets year-over-year that merits monitoring. Overall, the company appears financially sound with some early-stage growing pains.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	57,606	53,752	Growing current assets indicate ability to meet short-term obligations.
Cash at Bank and In Hand	29,336	21,052	Healthy cash balance, increased by ~39% year-on-year, supporting liquidity.
Debtors	28,270	32,700	Slight decrease in receivables, improving cash collection efficiency or reduced credit sales.
Current Liabilities	24,025	16,338	Increase in short-term liabilities, mainly taxation and social security, warrants attention.
Net Current Assets (Working Capital)	33,581	37,414	Positive working capital shows short-term financial health, though slightly reduced from prior year.
Net Assets (Equity)	33,581	37,414	Positive net asset position shows overall solvency, but a slight decline signals cautious monitoring.
Share Capital	1	1	Minimal share capital typical for small private companies.
Average Employees	1	1	Very small workforce, consistent with a micro/small enterprise.

Additional Notes:

• The company is exempt from audit, indicating it qualifies as a small company under UK law.
• No overdue filings, demonstrating good compliance health.
• Industry classification (SIC 74909) places the company in a niche professional/scientific sector, which may have variable cash flow patterns.

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3. Diagnosis: Financial Health Overview

DALLINGTON ENERGY LTD presents vital signs akin to a patient with stable but cautious cardiovascular readings. The company maintains a healthy cash flow with cash reserves comfortably exceeding current liabilities, which is critical for day-to-day operations and immediate obligations. The net current assets (working capital) are positive, indicating the company can cover its short-term debts without strain—a sign of operational liquidity "in good rhythm."

However, the rise in current liabilities, particularly taxation and social security, is a symptom of increased operational or statutory pressure. While not alarming, this should be monitored to ensure it does not become a strain or lead to cash flow congestion.

The slight decline in net assets year-on-year could indicate marginally lower retained earnings or a small loss, which is not unusual for a company in its initial years as it invests in growth or absorbs start-up costs. The company’s balance sheet does not show any long-term liabilities or fixed assets, consistent with a young service-oriented business.

The small employee count and exemption from audit suggest a lean operational model with limited overhead, which is positive for controlling fixed costs but may limit scalability unless investment in human capital or technology occurs.

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4. Recommendations: Improving Financial Wellness

• Monitor Working Capital Closely: The slight erosion in net current assets suggests the company should maintain tight control over debtor collections and creditor payments to avoid cash flow stress. Consider incentivizing faster payments or negotiating extended payment terms where possible.

• Tax and Social Security Planning: The increase in liabilities related to taxation and social security indicates a need for proactive cash flow planning to meet these obligations on time and avoid penalties or interest.

• Profitability Focus: Investigate the reasons behind the minor decline in net assets—whether due to operational losses or increased expenses—and implement measures to boost profitability, such as reviewing pricing strategies, cost controls, or diversifying client base.

• Prepare for Growth: With a single employee, consider whether additional personnel or outsourcing could improve capacity and revenue generation without disproportionately increasing fixed costs.

• Retain Financial Records and Compliance: Continue timely filing to maintain good standing with Companies House, and consider voluntarily preparing audited accounts in future years to enhance credibility with banks or investors if seeking external finance.

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Medical Analogy Summary

DALLINGTON ENERGY LTD's financial health resembles a patient with stable vital signs but showing mild symptoms of operational stress. The company’s liquidity is robust (healthy pulse), but the slight increase in liabilities and reduction in equity is akin to early warning signs that require regular check-ups and prudent management to prevent deterioration. With careful attention to cash flow and profitability, the company is well-positioned for sustained financial wellness.

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