Company Number: 13004596

Analysis Date: 2025-07-20 14:39 UTC

Financial Health Assessment for DANIEL BUILD LTD as of 30 November 2024

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1. Financial Health Score: B

Explanation:
DANIEL BUILD LTD exhibits solid financial health with growing net assets and positive working capital. The company shows strong resilience and an improving balance sheet, although the absence of cash reserves and reliance on debtors pose liquidity considerations. Overall, the company is financially sound but should monitor its cash flow more closely to maintain its good standing.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Net Current Assets	£46,774	Healthy positive working capital indicating the company can cover short-term liabilities.
Current Assets	£71,071	Mainly debtors; no cash on hand, which could risk liquidity if debtors delay payment.
Cash	£0	Symptom of potential cash flow stress despite overall asset strength.
Current Liabilities	£24,297	Modest short-term obligations relative to assets.
Net Assets / Shareholders’ Funds	£46,774	Strengthened equity base, growing from £32,257 in 2023, showing retained earnings accumulation.
Share Capital	£100	Minimal share capital, typical for a small private company.
Employee Count	5 (2024)	Slight growth in workforce, indicating business scaling.
Account Category	Unaudited Abridged	Reflects small company status with simplified reporting, but limits detailed financial insight.

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3. Diagnosis

• Balance Sheet Health: The company’s net current assets have increased significantly year-on-year (from £32,257 in 2023 to £46,774 in 2024), indicating an expanding buffer to meet short-term obligations. The net assets show steady growth, reflecting retained profits and business expansion.

• Liquidity Symptoms: Despite growing debtors (£71,071), the complete lack of cash reserves is a warning sign. This "dry cash flow" symptom suggests that while sales or receivables are strong, cash is not yet being converted or managed efficiently. This could expose the company to short-term liquidity stress if receivables are delayed.

• Profitability: Although no profit and loss account is filed, the increase in net assets and retained earnings implies profitability and earnings retention. The directors’ report suggests the company is generating revenue and managing expenses effectively.

• Operational Growth: An increase in employee numbers from 3 to 5 hints at operational scaling, which is positive but may increase overheads and financial strain if not matched by revenue growth.

• Risk Factors: The company is classified under SIC 43999 — "Other specialised construction activities not elsewhere classified" — an industry often exposed to project payment delays and cost overruns. Careful cash flow management is essential.

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4. Recommendations

• Enhance Cash Management: Establish stronger cash collection procedures to convert debtors into cash promptly. Consider offering incentives for early payment or stricter credit terms to reduce accounts receivable days.

• Build Cash Reserves: Prioritize accumulating cash balances even modestly to cushion short-term cash flow shocks. This will alleviate the "symptom" of zero cash despite good receivables.

• Profit and Loss Transparency: Although exempt from audit, consider voluntarily preparing a detailed profit and loss statement. This will enable better internal diagnosis of profitability and cost control.

• Monitor Workforce Costs: As staff numbers grow, regularly review labour costs against revenue to ensure sustainable expansion without overextending financial resources.

• Scenario Planning: Given the construction sector’s volatility, conduct cash flow scenario analyses to anticipate potential downturns or delayed payments, preparing contingency plans accordingly.

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Medical Analogy Summary:
DANIEL BUILD LTD’s financial "vital signs" show a heart (net assets) growing stronger and lungs (working capital) functioning well. However, the absence of cash in hand is akin to a patient with good oxygen levels but poor blood circulation—funds are tied up and not flowing freely. With careful management and improved cash flow "circulation," the company can maintain and enhance its financial wellness.

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