DLE ELECTRICAL LTD

Executive Summary

DLE Electrical Ltd exhibits a stable and healthy financial position typical of a new micro company, with positive net assets and working capital indicating sound liquidity and financial management. While the company currently shows no signs of distress, ongoing vigilance on cash flow and profitability will be essential to sustain growth and financial wellness. With prudent management and strategic planning, the outlook remains positive for this electrical installation business.

DLE ELECTRICAL LTD - Analysis Report

Company Number: 15752042

Analysis Date: 2025-07-29 21:23 UTC

Financial Health Assessment of DLE ELECTRICAL LTD

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1. Financial Health Score: B

Explanation:
DLE Electrical Ltd, a newly incorporated micro private limited company, demonstrates a solid start with positive net assets and net current assets, indicating a stable financial footing. Given its early stage and limited operating history, the company shows healthy financial "vital signs" but has limited historical data to fully assess sustainability and profitability. The B grade reflects a sound initial position with room to strengthen liquidity and operational cash flow as it grows.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	3,316	Represents investment in long-term assets such as equipment—commensurate with a small startup.
Current Assets	12,164	Includes cash and receivables; a positive sign of liquidity and ability to meet short-term needs.
Current Liabilities	8,142	Obligations due within one year; manageable given current assets.
Net Current Assets (Working Capital)	4,022	Positive working capital; indicates healthy short-term financial "breathing room."
Total Assets Less Current Liabilities	7,338	Reflects overall net asset base after deducting immediate liabilities.
Net Assets / Shareholders' Funds	6,613	Positive equity base; shareholder investment and retained earnings support company stability.
Average Number of Employees	2	Small team consistent with micro company status; operational scale is modest.

Interpretation:
The company shows no immediate financial distress or liquidity issues. Positive net current assets mean it can comfortably cover short-term debts, a vital sign of financial health akin to a patient with stable vital signs. The modest fixed assets indicate prudent capital expenditure in line with its size and early stage.

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3. Diagnosis

Overall Financial Condition:
DLE Electrical Ltd is in a stable financial condition for a micro entity in its first year of trading. The company’s balance sheet reveals no signs of financial distress ("symptoms of distress" such as negative working capital or net liabilities are absent). The presence of positive net assets and shareholders’ funds indicates a solid equity foundation, which is crucial for future growth and resilience.

However, being a newly incorporated business, it lacks a track record of profitability and cash flow trends, which limits the ability to predict long-term sustainability conclusively. The small scale of operations and limited assets suggest the company must carefully manage cash flow and operational costs to ensure ongoing viability.

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4. Recommendations

1. Maintain Healthy Cash Flow:
   Monitor cash inflows and outflows closely to ensure liquidity remains strong. Consider establishing cash flow forecasts to anticipate any short-term funding gaps.

2. Build Working Capital Buffer:
   While current working capital is positive, increasing this buffer by managing receivables and payables efficiently will protect against unforeseen expenses or delays in payments.

3. Plan for Asset Investment:
   As the business grows, consider strategic investment in fixed assets or technology to improve operational efficiency, but avoid overextension that could strain liquidity.

4. Monitor Profitability Metrics:
   As financial data accumulates, track gross and net profit margins to detect any early warning signs of margin compression or cost overruns.

5. Compliance and Reporting:
   Continue timely filing of accounts and confirmation statements to maintain good standing and avoid penalties, which can impact reputation and financial health.

6. Consider External Funding:
   If growth opportunities arise, evaluate options for external financing (loans, grants, or equity) to support expansion without risking over-leverage.

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