DGC GLAZING LTD

Executive Summary

DGC GLAZING LTD, a young micro-entity in the glazing sector, exhibits early-stage growth with increased fixed assets and equity. However, the company faces liquidity concerns due to negative working capital and rising long-term debt, signaling cautious management is needed. Strengthening cash flow and debt management will be key to ensuring robust financial health going forward.

DGC GLAZING LTD - Analysis Report

Company Number: 14673353

Analysis Date: 2025-07-29 18:25 UTC

Financial Health Assessment Report for DGC GLAZING LTD

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1. Financial Health Score: C

Explanation:
DGC GLAZING LTD shows a developing but somewhat fragile financial position typical for a young micro-entity company just over two years old. While there has been an increase in fixed assets and net assets, the company exhibits symptoms of working capital strain and growing long-term liabilities. The overall financial condition is stable but requires close attention to liquidity and debt management to ensure sustained health.

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2. Key Vital Signs

Metric	2025 (Latest)	Interpretation
Fixed Assets	£55,290	Healthy investment in long-term assets; increased from £14,394 in 2024, showing asset growth.
Current Assets	£27,079	Slight decrease from last year; includes cash and short-term receivables.
Current Liabilities	£32,824	Slight increase, exceeding current assets, leading to negative working capital.
Net Current Assets (Working Capital)	-£5,745	Negative working capital indicates potential liquidity stress—a "symptom of distress".
Long-term Liabilities	£22,353	New liabilities introduced in 2025, increasing financial obligations.
Net Assets (Equity)	£27,192	Increased from £13,261 in 2024, indicating retained profits or capital injections.
Employees	2	Very small workforce; typical for micro companies.

Interpretation:

• The negative net current assets suggest the company may struggle to cover short-term debts with available liquid assets, a warning sign akin to "labored breathing" in a patient.
• The growth in fixed assets suggests investment in equipment or property, which is positive but may be financed by borrowing (as seen by increased liabilities).
• The introduction of long-term liabilities (debt due after one year) points to increased leverage, which could impair flexibility if not managed carefully.
• The increase in net assets and shareholders’ funds is reassuring, indicating the company is building equity value.

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3. Diagnosis

DGC GLAZING LTD is in a developmental phase with an expanding asset base but showing early "symptoms of financial strain" due to negative working capital and emerging long-term debt. Being a micro-entity incorporated in 2023, these signs are not uncommon as start-ups invest and establish operations. However, the negative net current assets suggest the company is currently relying on external financing or delaying payments to manage liquidity, which is a risk factor.

The company’s balance sheet shows a moderate financial structure, but the reliance on creditors and increasing debt could lead to cash flow challenges if sales or collections do not improve. The small number of employees and the nature of the glazing and construction installation business indicate a potentially capital-intensive operation, which requires careful cash flow monitoring.

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4. Recommendations

To improve financial wellness and ensure the company’s longevity, consider the following actions:

• Improve Working Capital Management:
  Focus on accelerating receivables collection and negotiating longer payment terms with suppliers to reduce the current liabilities burden. Healthy working capital is critical to avoid liquidity crises.

• Debt Management Strategy:
  Reassess the terms and necessity of long-term liabilities. Explore refinancing options at lower interest rates or negotiate repayment schedules to ease cash flow pressure.

• Cash Flow Monitoring:
  Implement a rigorous cash flow forecasting system to anticipate liquidity needs and avoid surprises that could lead to payment delays or insolvency risks.

• Profitability Focus:
  Since profit and loss data is not available publicly, ensure the company focuses on profitable contracts and cost control to build retained earnings, thereby strengthening equity.

• Contingency Planning:
  Given the negative working capital, maintain a buffer of liquid assets or access to credit lines to manage unexpected expenses or downturns.

• Regular Financial Reviews:
  Schedule periodic financial health check-ups to detect early signs of distress and adjust strategies proactively.

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