DOM CARPENTRY LTD

Executive Summary

DOM CARPENTRY LTD shows stable but declining financial health, with positive net assets but decreasing current assets and equity indicating potential cash flow constraints. The company should focus on improving cash management, controlling costs, and planning for growth to strengthen its financial resilience and prevent further deterioration.

DOM CARPENTRY LTD - Analysis Report

Company Number: 13674018

Analysis Date: 2025-07-19 12:07 UTC

Financial Health Assessment: DOM CARPENTRY LTD (as of 31 October 2023)

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1. Financial Health Score: C

Explanation:
DOM CARPENTRY LTD’s financials indicate a moderate level of financial health. The company is maintaining positive net assets and working capital, but the decline in total net assets and current assets from the previous year signals caution. This grade reflects a company that is stable but showing early symptoms of financial stress that require management attention to avoid deterioration.

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2. Key Vital Signs

Metric	2023 Value (£)	2022 Value (£)	Interpretation
Fixed Assets	4,200	6,358	Slight decrease in long-term assets; could indicate asset disposals or depreciation outpacing investment.
Current Assets	15,050	23,915	Significant drop in liquid assets or receivables; potential cash flow tightening.
Current Liabilities	10,050	15,961	Reduction in short-term debts; possibly improved management or reduced operational scale.
Net Current Assets	5,000	7,954	Working capital remains positive but declining, signaling less buffer for day-to-day operations.
Total Assets Less CL	19,250	30,273	Decrease reflects overall asset base reduction; may impact company’s borrowing power or solvency.
Creditors > 1 Year	10,050	15,961	Long-term liabilities reduced, easing pressure on future cash outflows but still noteworthy debt level.
Net Assets (Equity)	9,200	14,312	Declining equity suggests accumulated losses or withdrawals; weakens financial resilience.
Average Employees	1	1	Micro entity with minimal staffing, typical for small bespoke operations.

Interpretation of Vital Signs:
The company exhibits a "symptom of distress" in shrinking current assets and equity, despite maintaining positive net current assets. The reduction in fixed assets and long-term creditors may indicate asset sales and debt repayments or restructuring. The balance sheet shows a company managing its liabilities but with a shrinking asset base, which could affect future growth capacity.

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3. Diagnosis

DOM CARPENTRY LTD is currently solvent with positive net assets and working capital—indicators of a "healthy cash flow environment" sufficient to cover short-term obligations. However, the year-over-year decline in net assets and current assets signals potential underlying challenges such as reduced sales, tighter cash flow, or increased operating costs.

Being a micro-entity, the company operates on a small scale with minimal staff, which limits operational risk but also constrains capacity for scale and investment. The director’s sole ownership and control suggest centralized decision-making, which can be agile but also risky if diversification of control and expertise is limited.

The reduction in total assets and equity could be early warning signs of financial stress, requiring vigilance. The company’s current financial structure suggests it is not immediately at risk of insolvency, but it needs to address these symptoms proactively to maintain long-term health.

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4. Recommendations

• Improve Cash Flow Management:
  Focus on accelerating receivables collection and managing payables to stabilize and increase current assets.

• Asset Review & Investment:
  Evaluate fixed asset usage and consider reinvestment in key equipment or tools to maintain operational efficiency and capacity.

• Cost Control Measures:
  Analyze operating expenses to identify areas for reduction or optimization, especially to counteract declining equity.

• Strategic Planning:
  Develop a business plan aimed at revenue growth or diversification to rebuild equity and strengthen financial buffers.

• Financial Monitoring:
  Establish monthly financial reviews and forecasts to detect and address distress signals early.

• Consider External Advice:
  Engage with financial advisors or accountants for tailored strategies, especially as the company grows beyond micro-entity status.

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Medical Analogy Summary

DOM CARPENTRY LTD’s financial health resembles a patient with stable vital signs but early symptoms of fatigue and nutrient depletion. The company is breathing steadily but shows signs of weakening reserves. Without timely intervention and nutritional support (cash infusion, cost control, and investment), the risk of progressive decline increases.

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