G-TEK DRYWALL & PLASTERING LTD

Executive Summary

G-Tek Drywall & Plastering Ltd exhibits signs of financial strain with significant reductions in cash and net current assets over the last year, suggesting liquidity challenges. While the company remains solvent with positive net assets, urgent actions to strengthen cash flow and control costs are recommended to avoid worsening financial distress. Continued monitoring and detailed profitability analysis will be critical to guide recovery and ensure sustainable business health.

G-TEK DRYWALL & PLASTERING LTD - Analysis Report

Company Number: 14006424

Analysis Date: 2025-07-29 19:00 UTC

Financial Health Assessment of G-Tek Drywall & Plastering Ltd as of 31 March 2024

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1. Financial Health Score: C

Explanation:
The company shows some positive signs such as positive net current assets and shareholders’ funds; however, a notable decline in liquidity (cash reserves nearly halved compared to prior year) and a reduction in net current assets indicate emerging stress. The absence of profitability data limits a full assessment, but current signs suggest cautious optimism with concerns to address.

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2. Key Vital Signs

Metric	31 March 2023	31 March 2024	Interpretation
Current Assets (£)	46,920	29,645	Sharp decrease—potential strain on liquidity.
Cash (£)	35,630	17,783	Cash halved—"weakening pulse" of cash flow.
Debtors (£)	11,290	11,862	Stable—consistent receivables management.
Current Liabilities (£)	22,897	22,835	Stable—short-term obligations steady.
Net Current Assets (£)	24,023	6,810	Significant drop—working capital "symptom of distress".
Shareholders’ Funds (£)	24,023	6,810	Decline mirrors working capital drop; equity reduced.
Employees (average)	2	3	Small team, growing slightly—manageable scale.

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3. Diagnosis

• Liquidity and Working Capital:
  The company’s “heartbeat” — its cash and liquid resources — has weakened significantly over the year. Cash reserves dropped by approximately 50%, and net current assets contracted by nearly 72%. This reduction signals potential liquidity issues; the business may find it harder to meet short-term debts if the trend continues.

• Financial Stability:
  Shareholders’ funds have decreased substantially from £24,023 to £6,810, indicating that the company’s net asset base has eroded. This might reflect operational losses or distributions, though absence of profit and loss data limits precise conclusions.

• Receivables Management:
  Debtors remain stable, which suggests the company maintains consistent credit management, a "healthy" sign in terms of customer payments.

• Operational Scale:
  The company is micro-sized with three employees, which generally allows for nimble management and low fixed costs, but also implies limited financial buffer.

• Risk Factors:
  The lack of an income statement and detailed profitability metrics is a limitation, but the decline in reserves and cash is a "red flag" symptom suggesting either reduced profitability or increased expenditure.

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4. Recommendations

• Strengthen Cash Flow:
  Implement tighter cash flow management and forecasting to reverse cash depletion. Consider negotiating better payment terms with customers or suppliers to improve working capital.

• Cost Control:
  Review operating expenses carefully to identify areas for cost reduction without compromising service quality.

• Profitability Monitoring:
  Obtain and review detailed profit and loss data to understand if the company is operating at a loss and why. Early identification of loss-making activities is critical.

• Debt Management:
  Maintain current liabilities at manageable levels; avoid taking on additional short-term debt until cash reserves improve.

• Financial Planning:
  Prepare budgets and scenario plans to anticipate future liquidity needs and potential business risks.

• Communication With Stakeholders:
  Keep shareholders and lenders informed about financial status and improvement plans to maintain confidence.

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Medical Analogy Summary

The company’s "vital signs" indicate a slowing heart rate in cash flow and working capital—symptoms of financial stress. While the "patient" is still alive and functioning, without intervention to restore liquidity and control costs, the risk of "financial shock" increases. Early treatment via cash flow management and cost control is essential to stabilize and improve health.

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