GV SCAFFOLDING LTD

Executive Summary

GV Scaffolding Ltd shows a healthy financial start with positive net assets and manageable liabilities, reflecting sound capital investment and initial profitability. However, limited cash reserves and reliance on director loans suggest the need for focused liquidity management and careful growth planning. Overall, the company is financially stable but should monitor key metrics regularly to sustain and enhance its business health.

GV SCAFFOLDING LTD - Analysis Report

Company Number: 14958355

Analysis Date: 2025-07-29 13:43 UTC

Financial Health Assessment Report: GV Scaffolding Ltd

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1. Financial Health Score: B

GV Scaffolding Ltd demonstrates a generally sound financial position for a newly incorporated entity, with positive net assets and manageable liabilities. The score reflects a healthy start with solid equity but notes caution due to reliance on director loans and limited operational history.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	14,655	Adequate short-term resources, primarily cash and receivables to cover immediate needs.
Cash on Hand	4,655	Relatively modest cash reserve, indicating limited liquidity buffer.
Debtors (Trade Receivables)	10,000	Outstanding payments expected, representing business activity but potential collection risk.
Current Liabilities	9,751	Obligations due within one year; manageable but requires monitoring.
Net Current Assets (Working Capital)	4,904	Positive working capital indicates ability to meet short-term liabilities comfortably.
Fixed Assets (Net Book Value)	47,375	Significant investment in tangible assets, reflecting a capital-intensive operation.
Long-Term Liabilities	13,697	Director’s loan account; non-bank debt source, which may carry flexible repayment terms.
Net Assets (Equity)	38,582	Solid equity base relative to company age, indicating value retained in business.
Share Capital	100	Minimal issued share capital, typical for a small private company.
Profit & Loss Reserve	38,482	Accumulated earnings or retained profits, showing initial profitability or capital input.
Employee Count	1	Small operation, likely owner-managed and labour-intensive.

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3. Diagnosis: Financial Symptom Analysis

• Healthy Cash Flow Indicators: The company’s positive net current assets (working capital of £4,904) suggest it can cover immediate bills and operational costs without distress. The presence of £4,655 in cash adds to liquidity, though this is modest, indicating need for careful cash management.

• Asset Investment: With tangible fixed assets valued at £47,375, GV Scaffolding Ltd has invested heavily in plant, machinery, and equipment. Depreciation policies over 4 years align with standard scaffolding industry practice. This investment is a sign of commitment to operational capacity but also ties up cash in non-liquid assets.

• Liability Structure: Current liabilities are reasonably low compared to current assets. However, the director’s loan account (£13,697) as a long-term liability highlights external financing from the company director. This is a common but important source of risk if not managed transparently. The company must ensure it can service or repay this loan without straining liquidity.

• Profitability and Reserves: The profit and loss reserve of £38,482 indicates retained earnings or capital contributions, which are positive signs for a company only about one year old. Absence of a detailed profit and loss statement limits insight into operational profitability versus capital injections.

• Operational Scale: With only one employee (likely the director), the company is very small and owner-dependent. This can be a strength for close control but a vulnerability if the business grows or if key personnel are unavailable.

• Compliance and Reporting: The company is up to date with filings and has taken advantage of small company exemptions, indicating good compliance with regulatory requirements.

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4. Recommendations for Improved Financial Wellness

• Enhance Liquidity Reserves: Aim to increase cash reserves beyond £4,655 to build a more robust liquidity buffer to handle unexpected expenses or payment delays.

• Monitor and Manage Director Loans: Formalise terms for director loan repayments and interest (if applicable) to avoid future cash flow strain or disputes.

• Strengthen Receivables Collection: Implement strict credit control to reduce debtor days and enhance cash inflows, minimizing risk of bad debts on the £10,000 trade receivables.

• Plan for Growth and Staffing: Consider gradual hiring or subcontracting to build operational capacity beyond a single employee to reduce business continuity risk.

• Track Profitability Closely: Maintain detailed profit and loss accounts to ensure operational profitability is growing alongside asset investment, and avoid over-reliance on capital contributions.

• Regular Financial Reviews: Conduct periodic financial health checks (quarterly or bi-annually), similar to a medical check-up, to detect early symptoms of financial distress such as declining working capital or rising liabilities.

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Summary:

GV Scaffolding Ltd exhibits the financial vitality typical of a young, capital-invested scaffolding company. Its positive working capital and asset base provide a solid foundation, but careful attention to liquidity management, director loan oversight, and operational expansion will be critical to maintaining and improving financial health as the business grows.