GEMINI HOME IMPROVEMENTS LTD

Executive Summary

Gemini Home Improvements Ltd is financially stable with healthy working capital and positive net assets, but it shows symptoms of tightening liquidity and reduced equity compared to the previous year. While the company is solvent and has a solid foundation, careful cash flow management and profitability monitoring are recommended to maintain financial wellness and support future growth.

GEMINI HOME IMPROVEMENTS LTD - Analysis Report

Company Number: SC720853

Analysis Date: 2025-07-20 13:29 UTC

Financial Health Assessment for GEMINI HOME IMPROVEMENTS LTD
(Reporting Date: 31 January 2024)

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1. Financial Health Score: B-

Explanation:
The company shows a stable financial position with positive net assets and a healthy working capital balance, indicating it is solvent and able to cover short-term obligations comfortably. However, a decline in total assets and net assets compared to the prior year signals some early symptoms of financial strain that warrant attention. Given the company is a micro-entity with only one employee and limited asset base, the score reflects a generally sound but cautious outlook.

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2. Key Vital Signs

Metric	31 Jan 2024	31 Jan 2023	Interpretation
Fixed Assets	£6,554	£8,240	Slight decrease in long-term assets; possibly asset disposals or reduced investment.
Current Assets	£9,778	£17,700	Significant reduction in liquid assets, mainly cash or receivables. This is a symptom of reduced cash inflow or increased usage of cash.
Current Liabilities	£2,577	£9,684	Sharp decrease in short-term debts, indicating improved management of payables or reduced reliance on credit.
Net Current Assets (Working Capital)	£7,201	£8,016	Positive and healthy; company can meet short-term debts and operational needs with some buffer.
Net Assets (Equity)	£13,255	£15,756	Decrease in equity indicates the company’s accumulated reserves have reduced, possibly due to operating losses or dividend payments.
Number of Employees	1	1	Stable headcount; very small scale operation.

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3. Diagnosis

The financial "vitals" suggest the company is currently solvent with a "healthy pulse" in terms of working capital and net asset value. The large reduction in current assets from £17,700 to £9,778 indicates the company is using up cash or has lower receivables, which may reflect a slowdown in sales or delayed customer payments—this is a key "symptom" to monitor.

The drop in fixed assets suggests less investment in equipment or property, which might be a deliberate cost-saving measure or a sign of reduced operational capacity.

The sharp decline in current liabilities is a positive symptom: the company is paying off short-term debts, improving liquidity, and possibly negotiating better payment terms.

However, the decline in net assets (equity) from £15,756 to £13,255 points to some erosion of accumulated funds, which could be due to trading losses or drawings by the owner/director. Given the company’s small size and single director-owner structure, the financial health is sensitive to even small losses.

Overall, the company is financially stable but showing early signs of stress in asset levels and equity, which should be addressed to avoid deterioration.

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4. Recommendations

• Improve Cash Flow Management:
  The significant drop in current assets, likely cash or receivables, is a "warning sign" of tightening liquidity. Focus on accelerating customer payments, tightening credit terms, and controlling expenses to maintain a healthy cash flow "heartbeat."

• Monitor Profitability Closely:
  The decline in net assets suggests possible trading losses. Review pricing, cost control, and operational efficiencies to ensure sustainable profitability.

• Asset Utilisation Review:
  Investigate the decrease in fixed assets. Consider whether this reflects planned disposal of unused equipment or a reduction in capital investment that might impact future capacity.

• Build Reserves:
  Aim to rebuild equity by retaining earnings rather than distributing profits prematurely. This strengthens the company’s financial "immune system" against unexpected shocks.

• Regular Financial Monitoring:
  Given the small scale and potential volatility, implement monthly cash flow and profit & loss reviews to catch symptoms of distress early.

• Consider Growth Strategy:
  Evaluate opportunities to increase turnover within the building completion and finishing sector (SIC 43390) to improve asset turnover and overall financial robustness.

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