DJS PLUMBER LTD

Executive Summary

DJS PLUMBER LTD is a newly established micro plumbing business displaying solid financial health with positive net assets and liquidity. The company’s financial "vital signs" are healthy, reflecting no immediate distress and adequate capacity to meet short-term obligations. Continued focus on cash flow management and gradual scaling will support a positive financial prognosis.

DJS PLUMBER LTD - Analysis Report

Company Number: 15549794

Analysis Date: 2025-07-20 16:26 UTC

Financial Health Assessment of DJS PLUMBER LTD

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1. Financial Health Score: B

Explanation:
DJS PLUMBER LTD exhibits a generally healthy financial position for a newly incorporated micro-entity. The company shows positive net assets and net current assets, indicating it has more short-term assets than liabilities—a sign of good liquidity. However, as a start-up with limited operating history and modest fixed assets, it carries some early-stage risks typical of young businesses. The "B" grade reflects solid initial financial footing with room for growth and vigilance.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	722	Very low; typical for a micro plumbing business.
Current Assets	26,421	Healthy cash and receivables, indicating liquidity.
Current Liabilities	14,235	Manageable short-term debts, not excessive.
Net Current Assets (Working Capital)	12,186	Positive working capital suggests ability to meet short-term obligations comfortably.
Total Assets less Current Liabilities	12,908	Indicates overall asset strength after short-term debts.
Net Assets / Shareholders’ Funds	11,870	Positive equity base, showing the company is solvent.
Number of Employees	1	Very small scale; low overheads but limited capacity.

Interpretation:

• The company’s positive working capital is a "healthy cash flow" sign, akin to a strong pulse indicating good operational liquidity.
• Net assets positive means no symptom of distress like insolvency or accumulated losses.
• Low fixed assets is typical for service businesses like plumbing, relying more on skills than heavy equipment.
• Small scale means vulnerability to shocks but also low fixed costs.

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3. Diagnosis

DJS PLUMBER LTD is in the early stages of business life, showing "normal vital signs" for a micro-entity plumbing company. Its financial health is sound with a positive net asset position and adequate liquidity to cover current liabilities. The balance sheet reveals no "symptoms of distress" such as negative equity or excessive short-term debt.

The company’s dependence on minimal fixed assets and a single employee (likely the director) means it is lean but also potentially exposed to operational risks like capacity constraints or absence of workforce redundancy.

The director (Dominic Smith) holds significant control and equity (75-100%), which simplifies decision-making but concentrates risk and responsibility.

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4. Recommendations

To strengthen financial wellness and prepare for future growth, the company should consider:

• Build Cash Reserves: Maintain and grow cash balances to buffer against unexpected expenses or seasonal fluctuations.
• Diversify Workforce: Plan for recruiting additional skilled staff to reduce operational risk from being a single-person operation.
• Monitor Working Capital: Keep a close watch on receivables and payables to sustain "healthy cash flow."
• Invest in Tools/Equipment: Gradually increase fixed assets as business scales to improve efficiency and capacity.
• Regular Financial Review: Since the company is a micro-entity, maintain accurate and up-to-date bookkeeping to detect early warning signs.
• Risk Management: Consider basic insurance coverage (public liability, professional indemnity) to protect against operational risks.
• Strategic Planning: Develop a simple business plan with revenue and cost forecasts to guide sustainable growth.

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