GRASSLANDS GROUP LTD

Executive Summary

Grasslands Group Ltd shows a stable financial condition with positive net assets and sufficient working capital, reflecting a healthy business foundation. However, the company's very low cash reserves reveal liquidity constraints that require improved cash flow management to ensure operational resilience. With targeted actions to accelerate debtor collections and build cash buffers, the company can strengthen its financial wellness and support sustainable growth.

GRASSLANDS GROUP LTD - Analysis Report

Company Number: 12704435

Analysis Date: 2025-07-29 21:05 UTC

Financial Health Assessment: GRASSLANDS GROUP LTD (Year ended 31 December 2023)

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1. Financial Health Score: B

Explanation:
Grasslands Group Ltd demonstrates a generally solid financial position with positive net assets and net current assets, indicating a stable working capital. While the company is small and relatively young, its balance sheet shows no alarming signs of distress. However, the extremely low cash reserves suggest a potential liquidity constraint, warranting close monitoring and improvement to achieve an "A" grade, which would reflect a robust financial health.

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2. Key Vital Signs

Vital Sign	Metric (2023)	Interpretation
Net Current Assets	£33,338	Healthy working capital; current assets exceed short-term liabilities by a good margin.
Cash at Bank	£179	Critically low cash reserves; potential liquidity symptom requiring attention.
Debtors	£55,099	High receivables relative to cash; may indicate cash tied up in customer payments.
Current Liabilities	£21,940	Manageable short-term obligations but must be balanced with available cash.
Net Assets / Equity	£33,338	Positive and growing shareholders' funds indicate accumulated retained profits.
Share Capital	£100	Minimal share capital; company is in early growth or maintaining lean capital.
Employee Count	1	Very small workforce; low overhead but limited operational scale.
Company Age	3.5 years	Relatively young, with early signs of growth and financial stability.

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3. Diagnosis

Grasslands Group Ltd presents with healthy financial "vital signs" such as positive net current assets and net assets, suggesting it is solvent and has a buffer to cover short-term debts. The net current assets of £33,338 act like a "healthy pulse," indicating the company can meet its current liabilities with its current assets.

However, the extremely low cash balance of £179 is a "symptom of liquidity distress". Despite having £55,099 in debtors, the company holds very little actual cash on hand, which can strain day-to-day operations and hinder the ability to respond to unexpected expenses or take advantage of business opportunities. This mismatch suggests that cash flow management is an area needing improvement—possibly due to slow debtor collections or payment terms not aligned with cash needs.

The company is small and employs only one person, indicating lean operations but also limited capacity for rapid scaling or absorbing operational shocks. The increase in net assets from £100 (in 2022) to over £33,000 (in 2023) shows that profits or retained earnings have accumulated, which is a positive sign of underlying business growth.

No indications of financial distress such as overdue filings, insolvency status, or director disqualifications are present, which supports a stable operational environment.

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4. Recommendations

To improve financial wellness and move towards an "A" rating, Grasslands Group Ltd should focus on the following actionable steps:

• Enhance Cash Flow Management:
  Prioritize faster collection of receivables and consider incentivizing early payments to convert debtors into cash more quickly. Review credit terms and tighten debtor management to reduce cash tied up in accounts receivable.

• Build Cash Reserves:
  Establish a target minimum cash balance to serve as a liquidity buffer. This will reduce the risk of cash flow "arrhythmia" that could disrupt operations.

• Monitor Creditors and Payment Terms:
  Negotiate longer payment terms with suppliers where possible to align outflows with cash inflows, easing liquidity pressures.

• Plan for Growth and Scalability:
  Consider expanding the workforce or operational capacity carefully, balancing growth ambitions with financial stability.

• Maintain Compliance and Reporting:
  Continue timely accounts and confirmation statement filings to avoid penalties and maintain creditor confidence.

• Explore Financing Options:
  If cash flow constraints persist, consider short-term financing solutions such as overdrafts or invoice financing as a bridge while improving internal cash flows.

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Executive Summary