Company Number: 14718880

Analysis Date: 2025-07-29 17:24 UTC

Financial Health Assessment of GOODALL ELECTRICAL AND BUILDING LIMITED

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1. Financial Health Score: B

Explanation:
GOODALL ELECTRICAL AND BUILDING LIMITED shows a generally sound financial position for a newly incorporated small business. The company holds positive net assets and maintains a working capital surplus, indicating that current assets comfortably cover current liabilities. However, as a young entity with limited operating history and modest asset base, there remains room to strengthen liquidity and operational cash flow stability to achieve an A-grade health score.

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2. Key Vital Signs

• Net Assets: £17,853
  Interpretation: Positive net assets imply the company’s total assets exceed its liabilities, a sign of solid financial "body strength" early in the business life cycle.

• Working Capital (Net Current Assets): £5,853
  Interpretation: Positive working capital indicates the company can meet short-term obligations, suggesting a "healthy cash flow" environment. However, the modest buffer means any unexpected expenses could strain liquidity.

• Fixed Assets: £12,000
  Interpretation: Represents tangible investments such as equipment or property. For a new business, this shows a reasonable base of operational tools, supporting ongoing revenue generation.

• Current Liabilities: £33,571
  Interpretation: Level of short-term debts and obligations is significant but manageable against current assets. Vigilance is needed to ensure timely settlements, preventing "symptoms of distress" like overdue payments.

• Cash at Bank: £39,424
  Interpretation: Strong cash holding relative to liabilities demonstrates good liquidity, providing a cushion for operational needs and unexpected costs.

• Share Capital and Reserves: Total equity of £17,853 with £100 share capital and retained earnings of £17,753.
  Interpretation: Retained earnings indicate early profitability or capital injections, a positive "health sign" for business longevity.

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3. Diagnosis

GOODALL ELECTRICAL AND BUILDING LIMITED is in the early stages of growth, showing encouraging financial "vital signs" such as positive net assets and working capital. The company benefits from a strong cash position, which is crucial for meeting short-term liabilities and supporting continued operations. The balance sheet reveals a modest fixed asset base, appropriate for a start-up in the building and electrical repair sector.

No overdue filings or compliance issues are noted, suggesting good governance "vitality." The single director and sole shareholder model simplifies decision-making but concentrates control risk.

However, the relatively narrow working capital margin signals that while the company is not currently in distress, it should guard against liquidity pressures, especially as it expands or encounters unforeseen expenses. The absence of detailed profit and loss data limits insights into profitability trends — a key area to monitor as the company matures.

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4. Recommendations

• Strengthen Working Capital: Aim to increase the net current assets buffer to at least 20-30% above current liabilities. This can be achieved by managing creditor payment terms and accelerating debtor collections to maintain a "healthy cash flow."

• Monitor Cash Flow Closely: Implement rolling cash flow forecasts to anticipate liquidity needs and avoid "symptoms of stress" such as cash shortages.

• Build Profitability Tracking: Develop detailed internal profit and loss monitoring to detect early signs of operational strain or inefficiency.

• Consider Diversifying Asset Base: Investment in essential tools or technology could enhance operational capacity, supporting growth without overextending financial resources.

• Maintain Compliance Vigilance: Continue timely filing of accounts and confirmation statements to avoid penalties and preserve good standing.

• Plan for Expansion Carefully: As the company grows, carefully assess the impact on working capital and ensure financing strategies align with operational demands.

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