Company Number: 12581008

Analysis Date: 2025-07-29 18:57 UTC

Financial Health Assessment for Forbury Electrical Limited

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1. Financial Health Score: B

Explanation:
Forbury Electrical Limited demonstrates solid financial stability with positive net assets, healthy working capital, and a consistent increase in retained earnings over recent years. Although the company is relatively young (incorporated in 2020) and small, its balance sheet shows expanding equity and manageable liabilities. The "B" grade reflects good financial health with some room for improvement in liquidity management and debt structure.

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2. Key Vital Signs

Metric	2024 (£)	Interpretation
Current Assets	119,444	Healthy level of liquid and near-liquid assets to cover short-term obligations.
Cash on Hand	54,387	Moderate cash reserves, slightly lower than prior year but adequate for operational needs.
Debtors (Trade + Other)	65,057	Increase in trade debtors suggests growing sales but requires efficient collection to maintain cash flow.
Current Liabilities	63,886	Slightly reduced from prior year; manageable short-term debts.
Net Current Assets (Working Capital)	55,558	Positive and improved working capital indicates good short-term financial health.
Long-term Liabilities	31,633	Hire purchase contracts represent moderate long-term borrowing; manageable but should be monitored.
Net Assets (Equity)	64,031	Increasing equity base shows retained profits and financial strength are growing.
Share Capital	100	Minimal share capital typical for small private companies; financial strength mainly from retained profits.

Additional Notes:

• Tangible fixed assets net of depreciation stand at £47,682, indicating investment in operational capacity.
• The company has no audit exemption and has prepared accounts under the small companies regime.
• Average employees: 3, indicating a lean operation.

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3. Diagnosis: Financial "Health" and Symptoms

• Healthy Cash Flow Symptoms: The company maintains positive cash balances and net current assets, indicating a "healthy pulse" in liquidity. The increase in current assets and net assets over the last few years signals growth and profitability.

• Symptom of Moderate Debt: The hire purchase liabilities (both short and long term) show the company is utilizing external financing to fund assets. This is normal but requires monitoring to avoid over-leverage, which could stress cash flow in tougher periods.

• Growth Sign: Rising debtors and net assets suggest expanding business activity and accumulation of profits. However, rising debtors (trade receivables) also display a symptom that the company must maintain efficient credit control to avoid cash flow "blockages."

• Stable Operational Base: With only three employees and consistent fixed asset investment, the company appears operationally stable and focused on its core electrical installation activities.

• No Signs of Financial Distress: All key metrics are positive, no overdue filings, no negative net assets, or accumulated losses reported. The company does not show symptoms of insolvency or liquidity crisis.

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4. Recommendations: Prescriptions for Financial Wellness

1. Enhance Debtor Management:

   • Implement or tighten credit control policies to reduce debtor days and improve cash conversion cycles. Prompt collections will ensure liquidity remains strong.

2. Monitor Debt Levels:

   • Regularly review hire purchase obligations and consider refinancing options if interest costs rise or if cash flow tightens. Aim to reduce reliance on hire purchase debt or secure more favourable terms.

3. Build Cash Reserves:

   • Although cash levels are adequate, a slight increase in cash reserves will provide a buffer against unexpected expenses or seasonal fluctuations.

4. Profit & Loss Transparency:

   • Since income statements are not publicly filed, internally ensure detailed profit and loss tracking to identify areas for margin improvement and cost control.

5. Plan for Growth Capital:

   • As the company grows, consider increasing share capital or seeking equity investment to strengthen the balance sheet and support expansion.

6. Regular Financial Reviews:

   • Conduct periodic financial health check-ups (quarterly) to monitor vital signs such as liquidity ratios, debt levels, and profitability trends.

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