GROUND COVER SOLUTIONS LTD

Executive Summary

GROUND COVER SOLUTIONS LTD maintains positive liquidity and solvency, indicating sound short-term financial health. However, a decline in net assets and working capital signals emerging financial strain. Focused efforts on improving profitability and cash flow management will strengthen the company’s financial resilience and support sustainable growth.

GROUND COVER SOLUTIONS LTD - Analysis Report

Company Number: SC667986

Analysis Date: 2025-07-29 17:26 UTC

Financial Health Assessment: GROUND COVER SOLUTIONS LTD (Year ended 31 March 2025)

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1. Financial Health Score: B-

Explanation:
GROUND COVER SOLUTIONS LTD shows generally stable financial footing with positive net assets and working capital, indicating a "healthy cash flow" and operational liquidity. However, a downward trend in net assets and net current assets over recent years signals some "symptoms of financial distress" that warrant caution. The company’s scale as a small private limited company and limited fixed assets also suggest modest capital investment and potential vulnerability to market or operational shocks.

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2. Key Vital Signs

Metric	2025 Value (£)	Interpretation
Net Assets	10,493	Positive net assets indicate the company owns more than it owes, a key marker of solvency.
Net Current Assets	9,689	Positive working capital reflects ability to cover short-term liabilities with short-term assets.
Cash at Bank	22,718	Strong cash position signals good liquidity and capacity to meet immediate expenses.
Current Liabilities	13,078	Short-term debts are manageable relative to cash and current assets.
Fixed Assets	993	Low fixed assets show minimal long-term investment, potentially limiting growth or operational scale.
Share Capital	10	Minimal share capital consistent with a small or micro company structure.
Trend in Net Assets	Decreased from 13,939 (2024) to 10,493 (2025)	Declining equity suggests the company has experienced losses or asset write-downs.

Vital Signs Interpretation:
The company maintains a "steady heartbeat" with positive liquidity and solvency, suggesting it can meet its immediate financial obligations. However, the "dip in net assets" signals underlying "symptoms of distress" such as reduced profitability or increased expenses that may impair long-term health if unaddressed.

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3. Diagnosis: Overall Financial Condition

GROUND COVER SOLUTIONS LTD presents as a small, actively trading business with a stable financial base but showing signs of strain. The consistent positive cash reserves and working capital indicate "healthy cash flow," vital for day-to-day operations. However, the decline in net assets from £13,939 to £10,493 over one year, alongside reduction in current assets and increase in trade creditors, points to some erosion in financial strength.

The small scale of fixed assets and minimal share capital further suggest limited buffer against adverse conditions. The company has not experienced any overdue filing or regulatory issues, which is a positive sign for governance and compliance health.

In medical terms, the company is akin to a patient with a generally stable condition but early signs of "fatigue" or "nutritional deficiency"—it is functional but needs dietary (financial) adjustments to regain strength and avoid future complications.

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4. Recommendations: Actions to Improve Financial Wellness

• Improve Profitability:
  Investigate causes behind the decline in net assets. Consider cost control measures or pricing strategies to boost margins and reverse losses.

• Enhance Working Capital Management:
  While current liquidity is adequate, the reduction in net current assets suggests tighter cash flow management is needed. Accelerate debtor collections and negotiate better terms with suppliers to maintain or increase working capital.

• Invest in Fixed Assets Wisely:
  The current low level of tangible fixed assets may limit operational capacity or growth. Assess if strategic investment in equipment or technology could improve productivity or market competitiveness.

• Monitor and Manage Creditors:
  Increased trade creditors could indicate delayed payments to suppliers, which if prolonged may damage supplier relationships. Maintain timely payments to avoid "financial inflammation."

• Maintain Regulatory Compliance:
  Continue timely filing of accounts and confirmation statements to avoid penalties and maintain stakeholder confidence.

• Strategic Planning:
  Consider preparing a financial forecast and stress-test scenarios to anticipate future cash flow needs and capital requirements.

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