Company Number: 13737338

Analysis Date: 2025-07-29 13:07 UTC

Financial Health Assessment Report: DARA FACADES LIMITED

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1. Financial Health Score: B

Explanation:
DARA FACADES LIMITED shows solid fundamentals with strong net asset growth and healthy working capital. The company has successfully built a positive equity position in a short period since incorporation in late 2021. While liquidity and solvency indicators are good, the business is still young and has limited fixed assets, indicating room for strengthening its asset base and long-term stability. Overall, a "B" grade reflects a healthy but developing financial condition that warrants monitoring and proactive management.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	23,259	Modest investment in tangible assets, mainly motor vehicles.
Current Assets	74,874	Good liquidity pool including cash and debtors.
Cash	32,987	Healthy cash reserve indicating good cash flow management.
Debtors	41,887	Reasonable receivables but requires efficient collection.
Current Liabilities	33,360	Short-term obligations are manageable relative to current assets.
Net Current Assets (Working Capital)	41,514	Strong positive working capital, a key sign of short-term health.
Net Assets (Equity)	64,773	Positive and growing equity base, crucial for long-term viability.
Share Capital	1	Minimal share capital, typical for small start-ups.
Profit & Loss Reserve	64,772	Accumulated retained earnings indicate profitability to date.

Additional Context:

• The company’s turnover and profit figures are not disclosed but the growth in equity and working capital indicates successful operations and retained profits.
• The business is categorized as a "Small" company with exemption from audit, which limits some financial detail but still provides a clear balance sheet snapshot.
• The director's report notes compliance with accounting standards and filing deadlines are current, showing good governance.

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3. Diagnosis: Financial Health Analysis

DARA FACADES LIMITED exhibits several "vital signs" of financial health:

• Healthy Cash Flow: Cash balances of £32,987 alongside strong net current assets show the company can cover short-term bills and maintain operational liquidity without distress.
• Strong Working Capital: Net current assets of £41,514 indicate the business has more short-term assets than liabilities, which is essential to fund day-to-day operations and absorb financial shocks.
• Growing Equity Base: Net assets increased from £5,004 in 2023 to £64,773 in 2024. This rapid equity growth suggests profitability or capital injections, which strengthens solvency and business resilience.
• Asset Investment: Tangible fixed assets (motor vehicles) at £23,259 demonstrate investment in operational capacity, although asset base is still modest for construction-related activities.

Symptoms of Potential Concern:

• Concentration of current liabilities includes a significant tax and social security liability (£31,317), which requires careful cash planning to avoid liquidity strain.
• Debtors of £41,887 require effective credit control to prevent cash flow delays—overdue or slow-paying customers could cause future distress.
• The minimal share capital (£1) is typical for small entities but underscores reliance on retained earnings and operational cash flow for funding, which may limit growth capacity without external financing.

Overall, the company appears financially stable with no immediate symptoms of distress. The balance sheet reflects a growing, well-managed enterprise with sound liquidity and solvency.

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4. Recommendations: Financial Wellness Improvement

1. Strengthen Asset Base:
   Consider investing further in fixed assets or technology to enhance operational efficiency and capacity, which could support higher turnover and margins.

2. Enhance Receivables Management:
   Implement or tighten credit control policies to accelerate debtor collections and improve cash flow predictability, reducing risk of working capital strain.

3. Tax Liability Planning:
   Proactively manage tax and social security liabilities to ensure timely payments without disrupting cash flow. Setting aside cash reserves for these predictable outflows is prudent.

4. Explore Capital Structure Options:
   Evaluate potential benefits of increasing share capital or seeking external equity/debt funding to support expansion and buffer financial flexibility.

5. Regular Financial Monitoring:
   Maintain regular internal financial reviews to track key metrics like liquidity ratios, debtor days, and profitability trends to detect early signs of financial stress.

6. Business Continuity Planning:
   Given the company’s young age, formalize risk management strategies including contingency plans for market or operational shocks.

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