DANIELS BUILDING SERVICES LTD

Executive Summary

Daniels Building Services Ltd demonstrates steady financial improvement with healthy working capital and growing retained earnings, indicating good operational performance for its size. While liquidity and governance are adequate, enhancing cash reserves and debtor management will be critical to sustain growth and avoid potential cash flow issues. Overall, the company is financially healthy but should proactively manage risks associated with its small scale and concentration of control.

DANIELS BUILDING SERVICES LTD - Analysis Report

Company Number: 12804696

Analysis Date: 2025-07-20 15:30 UTC

Financial Health Assessment of Daniels Building Services Ltd

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1. Financial Health Score: B

Explanation:
Daniels Building Services Ltd shows a relatively healthy financial position for a young private limited company in the construction installation sector. Key vitality indicators like net current assets and net assets have steadily improved every year since incorporation, indicating growth and positive retention of earnings. However, the company remains small in scale with modest cash reserves, and limited diversification in assets. This places the firm in a good but not yet robust financial condition, meriting a solid B grade.

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2. Key Vital Signs

Vital Sign	Value (2023)	Interpretation
Net Current Assets	£13,678	Positive working capital indicates the company can cover short-term liabilities comfortably.
Cash at Bank	£4,696	Cash reserves have improved significantly, indicating healthier liquidity ("healthy cash flow").
Debtors	£14,857	Debtor levels are stable and manageable, but represent a significant portion of current assets.
Current Liabilities	£5,875	Current debts are moderate compared to assets and manageable.
Net Assets (Equity)	£13,678	Equity has increased steadily, showing retained profits and capital growth.
Share Capital	£100	Minimal share capital typical of a small private company.
Employee Count	1 (average)	Very small workforce, consistent with company size and structure.

Additional Notes:

• The company has no long-term liabilities disclosed, which reduces financial risk.
• The increase in cash balance from £915 in 2022 to £4,696 in 2023 is a positive sign of improved operational cash generation or financing.
• The company's accounts are unaudited but filed on time, indicating compliance with regulatory requirements.

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3. Diagnosis

Overall Business Health:
Daniels Building Services Ltd exhibits the "symptoms of a healthy financial patient" with a positive and increasing net current asset position. The working capital surplus indicates the company has a buffer to meet its short-term obligations without strain, suggesting effective cash management and operational control.

The increase in retained earnings (profit and loss account) from £8,727 to £13,578 over the last year indicates profitability and prudent reinvestment or cash retention. However, the company's reliance on debtors as a large component of current assets suggests potential exposure to payment delays from customers, which could cause liquidity stress if not managed.

The minimal share capital and single director/employee structure is typical of a micro to small private enterprise, which often means limited diversification and some dependency on the key individual. The absence of any auditor's report (due to small company exemption) reduces transparency but is common in this size bracket.

Potential Weaknesses or Risks:

• Concentration risk: Control and ownership rest fully with one individual, posing governance risks.
• Limited cash buffer: Although improved, cash reserves remain modest relative to total current assets.
• Dependence on timely collection of debtors to maintain liquidity.

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4. Recommendations

To strengthen financial wellness and prepare for future growth, Daniels Building Services Ltd should consider:

• Enhancing Cash Reserves: Strive to increase cash holdings to cover at least 3 months of operating expenses, improving the "liquidity heart rate" and cushioning against unexpected outflows.
• Improving Debtor Management: Implement rigorous credit control policies to reduce debtor days and mitigate risk of late payments ("symptoms of distress" in receivables).
• Diversifying Funding Sources: Explore options for raising additional equity or short-term credit lines to support scaling operations or capital investment.
• Strengthening Corporate Governance: If growth is anticipated, consider appointing non-executive directors or advisors to broaden oversight and reduce dependency on a single director.
• Regular Financial Monitoring: Maintain timely and detailed financial reviews, including cash flow forecasts, to detect early signs of financial stress.
• Planning for Growth: Invest in operational efficiencies and potentially hire to increase workforce capacity, reducing bottlenecks and enhancing revenue generation.

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