HARDNESS CALIBRATIONS LTD

Executive Summary

HARDNESS CALIBRATIONS LTD shows clear signs of financial recovery and growth, moving from liquidity challenges to a stronger net asset position in 2023. While the company's financial health is currently stable and improving, enhancing capital reserves and maintaining positive working capital will be crucial for sustained resilience and growth.

HARDNESS CALIBRATIONS LTD - Analysis Report

Company Number: 13035660

Analysis Date: 2025-07-20 16:16 UTC

Financial Health Assessment Report for HARDNESS CALIBRATIONS LTD

---

1. Financial Health Score: B

Explanation:
HARDNESS CALIBRATIONS LTD demonstrates a generally sound financial position with positive net assets and improving working capital over recent years. The company is exhibiting signs of financial recovery and stability, particularly in the latest financial year. However, as a micro-entity with limited scale and some volatility in net current assets historically, it has room to strengthen liquidity and expand its capital base for sustained growth.

---

2. Key Vital Signs

Metric	2023 (£)	2022 (£)	Interpretation
Fixed Assets	25,822	20,958	Moderate investment in long-term assets; stable growth
Current Assets	116,691	70,559	Healthy increase indicating better cash and receivables
Current Liabilities	96,431	86,680	Slight increase; needs monitoring against current assets
Net Current Assets (Working Capital)	24,743	-16,121	Significant improvement; now positive, indicating liquidity is healthier
Net Assets (Shareholders’ Funds)	50,563	4,837	Strong increase showing growth in company equity
Share Capital	30	30	Minimal; capital injection could support growth
Average Number of Employees	4	5	Small team size consistent with Micro entity

Interpretation of Vital Signs:

• The company’s working capital, a key "pulse" of short-term financial health, moved from negative in 2022 to positive in 2023. This suggests a "recovery from distress," indicating better ability to meet short-term obligations.
• The net assets have grown substantially, showing that the company has strengthened its financial "immune system" through retained earnings or asset growth.
• Current liabilities have risen but are still well covered by current assets, indicating manageable short-term debts.
• Fixed assets growth suggests ongoing investment in the operational base—a positive sign of business confidence.
• The company remains a micro-entity with a small share capital base, which limits buffer capacity against shocks.

---

3. Diagnosis

Overall Financial Condition:
HARDNESS CALIBRATIONS LTD appears to be in a recovery and growth phase. The "symptoms" of liquidity strain evident in 2022, with negative working capital, have been addressed effectively by 2023, with current assets increasing and improving the net current assets figure. The company’s net assets have increased tenfold, indicating accumulation of retained profits or capital appreciation.

The business operates in a specialized engineering consultancy niche (SIC 71122), which likely requires maintaining technical equipment (reflected in fixed assets). The financials suggest the company is managing its "cash flow heartbeat" well enough to cover liabilities and invest in assets.

However, the small share capital and modest employee base suggest limited scale and potentially a vulnerability to external shocks or market fluctuations. The company’s financial "immune system" would benefit from enhanced capital reserves or diversification of funding sources.

No overdue filings or legal distress signals are present, and the company is active and compliant with Companies House filing requirements.

---

4. Recommendations

To improve and maintain financial wellness, HARDNESS CALIBRATIONS LTD should consider the following specific actions:

• Strengthen Capital Structure:
  Explore options to increase share capital or secure additional equity funding to build a larger financial buffer against downturns or investment needs.

• Maintain Healthy Working Capital:
  Continue to monitor receivables and payables to keep the working capital positive. Consider negotiating better payment terms with suppliers and clients to optimize cash flow.

• Expand Asset Base Prudently:
  Invest strategically in fixed assets that improve operational efficiency or expand service capacity, but avoid overextension that could strain liquidity.

• Monitor Liabilities Closely:
  Keep short-term debt under control, ensuring that liabilities do not outpace current assets, especially given the company’s micro-entity status.

• Plan for Growth and Diversification:
  With a small employee base and niche focus, consider scaling operations or diversifying service offerings to stabilize revenue streams and reduce business risk.

• Regular Financial Health Checks:
  Adopt periodic internal reviews of financial metrics akin to regular health check-ups to catch early "symptoms" of distress and act proactively.

---