Company Number: 13942718

Analysis Date: 2025-07-20 13:40 UTC

Financial Health Assessment for DOK Electrical Ltd (as of 31 March 2025)

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1. Financial Health Score: C

Explanation:
DOK Electrical Ltd shows mixed financial signals. While the company remains active and solvent, recent financial changes raise caution. The significant increase in long-term finance lease obligations and a sharp decline in net assets suggest symptoms of financial strain. The score reflects a company that is still operational but displaying early signs of stress that require monitoring and proactive management.

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2. Key Vital Signs

Metric	2025 (£)	2024 (£)	Interpretation
Fixed Assets (Tangible)	33,953	17,067	Increased investment in assets, potentially via leasing.
Current Assets	16,022	35,855	Significant decrease, indicating reduced liquidity.
Cash at Bank	9,873	15,185	Cash reserves have dropped, reducing liquidity buffer.
Debtors	6,149	20,670	Sharp fall, could indicate better collection or loss of sales.
Current Liabilities	12,700	19,331	Reduced short-term debts, positive but requires context.
Net Current Assets	3,322	16,524	Working capital reduced drastically, potential liquidity risk.
Creditors due after 1 year	21,781	3,483	Large increase in long-term financial obligations; "debt burden."
Deferred Tax Liability	6,451	4,267	Growing deferred tax indicates timing differences or profitability changes.
Net Assets (Equity)	9,043	25,841	Significant decline in net worth; loss of retained earnings.
Share Capital	2	2	Minimal share capital, typical for small private companies.
Number of Employees	1	1	Very small operation; reliance on key personnel.

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3. Diagnosis: What the Financial Data Reveals

DOK Electrical Ltd is in a delicate financial condition with several "symptoms of distress" evident in its financial statements:

• Liquidity Strain: The company's "healthy cash flow" seems compromised, as cash reserves and net current assets have shrunk considerably. This drop from £16.5k net current assets in 2024 to just £3.3k in 2025 suggests tighter short-term funds to meet immediate obligations.

• Growing Long-Term Debt Load: The company has acquired substantial finance lease obligations (£28,981 total, with £21,781 due after one year), which is a heavy burden for a small company with limited equity. This could restrict financial flexibility and increase fixed costs.

• Asset Structure Changes: The increase in fixed assets mostly reflects leased motor vehicles, which improves operational capacity but also increases liabilities and reduces liquidity.

• Erosion of Equity: The net assets have fallen from £25,841 to £9,043, signaling retained losses or other adjustments that reduce the financial cushion. This weakens the company's ability to absorb shocks.

• Small Scale Operation: With only one employee (the director) and minimal share capital, the company faces risks related to concentration of control and limited resource base.

Overall, the company is not currently insolvent but is showing signs of financial stress that could worsen without corrective measures.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Improve Cash Flow Management: Accelerate debtor collections and manage payables carefully. Consider negotiating better payment terms to avoid liquidity crunches.

• Review Lease Obligations: Assess the necessity and terms of finance leases. Explore options to refinance, restructure, or reduce lease commitments to lower fixed financial burdens.

• Build Equity Resilience: Consider capital injections from shareholders or retained earnings to rebuild net assets and provide a stronger financial buffer.

• Cost Control and Efficiency: Given the small scale, strict cost management is vital. Review expenses to ensure all spending contributes to revenue generation.

• Diversify Revenue Streams: Explore opportunities to increase turnover to improve profitability and cash inflow, reducing reliance on debt.

• Regular Financial Monitoring: Implement monthly financial reviews focusing on liquidity and debt levels to identify early warning signs and react promptly.

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