Company Number: 13148532

Analysis Date: 2025-07-20 17:28 UTC

Financial Health Assessment: GREEN CONSTRUCTION SERVICES LTD

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1. Financial Health Score: C

Explanation:
The company shows signs of financial strain with a declining net asset base and a slight working capital deficit in the latest year, indicating emerging liquidity concerns. However, the company is still operational with positive net assets and modest fixed assets, suggesting it is not in immediate distress. The "C" grade reflects a need for cautious monitoring and remedial actions to avoid worsening financial health.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	1,564	Consistent but small asset base, reflecting limited long-term investment.
Current Assets	27,969	Increased significantly, positive sign for short-term resource availability.
Current Liabilities	28,324	Higher than current assets, leading to a net current liabilities position (working capital deficit).
Net Current Assets (Working Capital)	-13	Slightly negative, indicating a potential short-term liquidity issue ("symptom of distress").
Total Assets less Current Liabilities	1,551	Declined significantly from prior year, showing overall reduction in asset base after liabilities.
Net Assets (Shareholders Funds)	771	Reduced by nearly 50% year-on-year, suggesting accumulated losses or withdrawals impacting equity.
Director Loan Advances	20,943	Substantial unsecured loan to director, which may be a risk or a symptom of funding gaps.
Employees	1	Very small workforce, typical for micro-entity but limits operational scale.

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3. Diagnosis

Underlying Symptoms:

• The company’s net current assets have turned negative in 2024 (-£13), moving from a positive working capital of £542 in 2023. This "healthy cash flow" indicator has weakened, signaling potential short-term liquidity pressure.
• Net assets have declined sharply from £1,532 to £771, implying that the company’s retained earnings or equity base is eroding—possibly due to operating losses or director withdrawals.
• The increase in current assets is largely due to a rise in director loans (£20,943), which while providing cash inflow, is an unsecured and potentially unstable funding source.
• Fixed assets remain minimal and relatively stable, reflecting the nature of the business (quantity surveying), which likely relies more on intellectual capital than physical assets.
• The average number of employees is just one, showing a very lean operation but also limiting capacity for growth or diversification.
• No overdue filings or compliance issues indicate good administrative health.

Overall:
The company displays symptoms akin to a patient with borderline vital signs—its liquidity (working capital) is slipping and equity base is shrinking, suggesting stress but not yet critical failure. The dependency on director loans to maintain current assets is a concern, akin to relying on emergency medication rather than sustainable health improvements.

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4. Recommendations

1. Improve Working Capital Management:

   • Tighten control over current liabilities and accelerate collection of receivables to restore positive working capital and ensure "healthy cash flow".
   • Avoid increasing short-term debts that exacerbate liquidity strain.

2. Reduce Director Loan Dependence:

   • Formalize repayment plans for director loans or seek alternative financing to reduce reliance on unsecured internal funding.
   • Consider equity injection or external funding if growth plans require capital.

3. Cost Control & Profitability Review:

   • Conduct a thorough review of operating expenses and project profitability to identify and cut non-essential costs.
   • Explore ways to increase revenue or diversify service offerings within quantity surveying to improve margins.

4. Strengthen Equity Base:

   • Retain earnings where possible rather than distribution or drawing down reserves to restore net asset strength.
   • Consider capital restructuring or new share issuance if appropriate.

5. Regular Financial Monitoring:

   • Implement monthly cash flow forecasting and financial health checks to detect early signs of distress.
   • Engage accountant or financial advisor periodically to assess risk and recommend adjustments.

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