GWILLIAM RECYCLING LIMITED

Executive Summary

Gwilliam Recycling Limited shows a solid asset base and positive equity reflecting initial investment, but suffers from a liquidity imbalance due to negative net current assets, indicating working capital challenges typical for a start-up micro-entity. With proactive cash flow management and cost control, the company can strengthen its financial health and support sustainable growth in its waste recycling operations.

GWILLIAM RECYCLING LIMITED - Analysis Report

Company Number: 14718479

Analysis Date: 2025-07-29 20:17 UTC

Financial Health Assessment for Gwilliam Recycling Limited

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1. Financial Health Score: C

Explanation:
The company shows a solid foundation in fixed assets and shareholders' funds indicating initial capital investment and equity. However, the presence of significant net current liabilities (-£82,246) suggests liquidity stress or working capital challenges. This score reflects a "stable but cautious" outlook typical for a new micro-entity in its first financial year, with warning signs that need careful management.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	164,851	Healthy long-term investment in operational assets.
Current Assets	85,111	Cash, receivables, and short-term assets base.
Current Liabilities	167,357	Short-term debts and obligations due within a year.
Net Current Assets (Working Capital)	-82,246	Negative value indicates liquidity constraints.
Total Assets Less Current Liabilities	82,605	Indicates net assets after short-term debts.
Shareholders Funds (Equity)	82,605	Owner’s stake in the business, fully positive.

• Vital Sign Analysis:
  The negative working capital is a key symptom of potential liquidity issues, meaning the company owes more short-term than it currently holds in liquid assets. This could signal cash flow tightness — a "symptom of distress" that requires monitoring. However, the positive fixed assets and shareholder funds reflect a reasonable capital base, which is reassuring for a first-year micro-entity.

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3. Diagnosis

Gwilliam Recycling Limited is a newly incorporated micro-entity specializing in the treatment and disposal of non-hazardous waste. The financial snapshot reveals that the company has invested significantly in fixed assets, likely reflecting equipment or facilities essential to its recycling operations.

However, the negative net current assets suggest the company may be experiencing early-stage liquidity pressures, possibly due to initial operating expenses, supplier payments, or delayed client inflows. This imbalance can be compared to a patient with a strong skeletal frame (fixed assets) but weak blood circulation (cash flow), indicating the need for improving short-term financial management.

The company's micro-entity status and exemption from audit requirements, along with only one employee on average, show it is still in the early development phase, which often comes with cash flow volatility.

Overall, the financial health is stable but vulnerable, requiring careful attention to cash flow management and working capital optimisation to avoid future distress.

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4. Recommendations

1. Improve Working Capital Management:

   • Negotiate longer payment terms with suppliers to ease immediate cash outflows.
   • Accelerate receivables collection to bring in cash quicker.
   • Monitor inventory or waste processing cycle closely to avoid cash being tied up unnecessarily.

2. Cash Flow Forecasting:

   • Implement detailed cash flow projections to anticipate liquidity needs and avoid surprises.
   • Establish a cash reserve or secure a short-term credit facility as a buffer.

3. Cost Control Measures:

   • Review operational expenses to identify any non-essential costs that can be deferred or reduced.
   • With only one employee so far, consider the impact of hiring on cash flow before expansion.

4. Explore Funding Options:

   • Consider additional equity injection or small business loans if working capital pressures persist.
   • Look for government grants or environmental incentives applicable to recycling businesses.

5. Regular Financial Monitoring:

   • Schedule monthly reviews of key financial metrics to detect early warning signs of distress.
   • Engage with financial advisors or accountants for periodic health checks.

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