HARJIT SINGH GROUNDWORK LTD

Executive Summary

HARJIT SINGH GROUNDWORK LTD exhibits a healthy and improving financial position with significant growth in net current assets and shareholders' funds since incorporation. The company shows no symptoms of financial distress, maintaining positive working capital and equity. Continued prudent financial management and monitoring of liabilities will support a robust outlook for future growth.

HARJIT SINGH GROUNDWORK LTD - Analysis Report

Company Number: 14253280

Analysis Date: 2025-07-20 14:12 UTC

Financial Health Assessment for HARJIT SINGH GROUNDWORK LTD

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1. Financial Health Score: B

Explanation:
The company demonstrates a solid improvement in its financial position within the micro-entity category. The net current assets and shareholders' funds have grown substantially year-over-year, indicating strengthening liquidity and equity. While the scale is small, the financial "vital signs" show a healthy upward trend without signs of distress. However, the company is still young and relatively small, so there remains scope for further growth and stability before reaching an A grade.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	8,816	1,477	Healthy increase in liquid and short-term assets, indicating improved cash or receivables.
Current Liabilities	3,397	797	Increased short-term obligations, but still manageable relative to assets.
Net Current Assets	5,419	680	Positive working capital, showing the company can comfortably cover short-term debts.
Total Assets Less Current Liabilities	5,419	680	Reflects net assets and ability to meet liabilities; steady growth is a good sign.
Shareholders' Funds (Equity)	5,419	680	Equity growth signals retained earnings or fresh capital input, strengthening financial base.

Additional Notes:

• The company employs an average of 2 people, consistent year over year, indicating stable operational scale.
• The accounts are unaudited but filed timely, with no overdue returns or accounts.
• The company operates in construction of commercial buildings, a sector that often requires strong cash flow management.

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3. Diagnosis

The financial "pulse" of HARJIT SINGH GROUNDWORK LTD appears steady and improving. The increase in current assets and net current assets suggests a "healthy cash flow," which is critical to meet upcoming obligations and invest in growth. The positive shareholders' funds indicate that the company is building a solid equity base rather than relying excessively on debt, reducing financial strain.

There are no signs of financial "symptoms of distress" such as negative working capital or falling equity. However, the relatively modest scale and current liabilities growth warrant monitoring to ensure liabilities remain well-covered as the business expands.

Being a young company incorporated in 2022, the rapid growth in net assets within two years is promising. The company’s financial health is analogous to a patient who has recovered well from an initial phase of vulnerability and is now gaining strength steadily.

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4. Recommendations

To maintain and improve financial wellness, the company should consider:

• Maintain Positive Working Capital: Continue prudent management of receivables, payables, and inventory to preserve liquidity. Avoid overextension of credit to clients or suppliers.

• Build Cash Reserves: Given the construction sector’s potential for project delays and payment lags, maintaining a cash buffer will prevent cash flow "arrhythmias" that can disrupt operations.

• Monitor Liability Growth: The rise in current liabilities should be tracked closely to ensure they do not outpace asset growth, which could signal emerging liquidity stress.

• Plan for Growth Capital: If the company plans to expand, exploring sources of financing (equity or low-cost debt) early can prevent sudden financial strain.

• Regular Financial Reviews: Implement quarterly financial reviews to detect early warning signs and adjust operational or financial strategies accordingly.

• Compliance and Governance: Continue timely filing of accounts and returns to avoid penalties and maintain good standing, which supports creditworthiness and stakeholder confidence.

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