ESKGROVE LIMITED

Executive Summary

ESKGROVE LIMITED currently maintains a positive but declining financial position, with adequate cash reserves but reduced net assets and working capital compared to the previous year. The company exhibits signs of financial caution, such as reduced debtors and no employees, which may limit growth potential. Focused efforts on improving revenue streams, managing cash flow, and monitoring costs are essential to strengthen future financial health and sustainability.

ESKGROVE LIMITED - Analysis Report

Company Number: SC682439

Analysis Date: 2025-07-29 20:32 UTC

Financial Health Assessment for ESKGROVE LIMITED (As of 31 March 2024)

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1. Financial Health Score: C

• Explanation: ESKGROVE LIMITED shows some signs of financial stability but also exhibits symptoms of financial stress. The company maintains positive net current assets and net assets, reflecting some working capital buffer and positive equity. However, a significant reduction in debtors and cash compared to the previous year, alongside relatively high creditors, signals cautious attention is needed. The absence of employees suggests a very lean operation or perhaps a non-trading status, which impacts revenue generation and cash flow health.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£154,440	Includes £145,763 cash and £8,677 debtors; cash is the lifeblood for daily operations.
Current Liabilities	£115,750	Amounts owed within one year; these must be managed to avoid liquidity strain.
Net Current Assets	£38,690	Positive but significantly lower than last year (£64,686), indicating reduced working capital.
Net Assets (Equity)	£38,690	Positive net worth, but down from £64,686 last year, indicating erosion of retained earnings.
Share Capital	£100	Nominal capital; the company is likely owner-financed rather than externally funded.
Debtors	£8,677	Sharp decline from £286,860 in 2023, possibly indicating reduced sales or collection issues.
Cash at Bank	£145,763	Increased from £57,817 in 2023, suggesting improved liquidity or cash inflows from financing.
Creditors	£115,750	Reduced from £279,991 in 2023, indicating some improvement in managing payables.
Employees	0	No employees, possibly a one-person operation or dormant in terms of staff.

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3. Diagnosis: Financial "Health" and Symptom Analysis

• Healthy Signs:

  • Positive Net Current Assets: The company has more current assets than liabilities, a good indicator of short-term financial health.
  • Positive Net Assets: The company holds positive equity; it is not insolvent on a balance sheet basis.
  • Improved Cash Position: Cash at bank has more than doubled, providing a cushion for operational needs and creditor payments.

• Symptoms of Financial Distress:

  • Declining Net Assets: Net assets declined by around 40% from £64,686 to £38,690, suggesting the company has been using up reserves or accumulating losses.
  • Sharp Drop in Debtors: The dramatic fall in debtors may indicate a drop in sales, reduced business activity, or more efficient collection, but if sales have dropped, it points to underlying revenue issues.
  • High Creditors Relative to Debtors: Creditors are approximately 13 times the amount of debtors, which may indicate pressure on cash flow or reliance on supplier credit.
  • No Employees: The absence of employees might reflect a micro-business or consultancy model, but it could also mean limited operational capacity to grow revenue.
  • No Audit and Small Company Regime: While normal for a small company, unaudited accounts mean financial data is not independently verified, which may mask deeper issues.

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4. Prognosis: Future Financial Outlook

• Short-Term Outlook: The company’s current cash reserves provide a "healthy pulse," but the reduction in net assets and working capital signals risk. Without increasing sales or managing liabilities carefully, the company could experience liquidity strain.
• Medium to Long-Term Outlook: To avoid further erosion of equity and maintain solvency, the company must improve revenue generation or control operational costs. The absence of employees may limit growth potential unless the director can manage all operational functions efficiently.

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5. Recommendations: Steps to Improve Financial Wellness

1. Improve Revenue Generation:

   • Investigate the reason for the sharp drop in debtors and sales activity.
   • Explore new business development avenues or expand existing client base.

2. Enhance Cash Flow Management:

   • Monitor and negotiate creditor payment terms to better align with incoming cash.
   • Optimize debtor collection processes to ensure faster cash inflows.

3. Cost Control & Operational Efficiency:

   • Maintain lean operations but assess if strategic hires or outsourcing could boost productivity.
   • Review all expenses to identify potential cost savings without compromising service quality.

4. Financial Monitoring & Reporting:

   • Consider voluntary audit or professional financial review to enhance reliability of financial data.
   • Implement regular cash flow forecasting and budgeting to detect and address financial "symptoms" early.

5. Strengthen Capital Base:

   • Explore options for additional equity injection or external financing if growth requires investment.

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