Company Number: 13952056

Analysis Date: 2025-07-20 15:08 UTC

Financial Health Assessment Report: Hull Resin Flooring Ltd (as of 31 March 2024)

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1. Financial Health Score: C

Explanation:
Hull Resin Flooring Ltd shows a moderate financial position typical for a young company in its second full year of trading. While it maintains positive net assets and working capital ("healthy cash flow buffer"), there is a noticeable reduction in current assets and net assets compared to the previous year, signaling some financial strain or investment phase. The presence of deferred tax liabilities and a decline in cash reserves are symptoms to monitor closely. Overall, the company is stable but exhibits signs of financial tightening.

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2. Key Vital Signs:

Metric	31-Mar-2024	31-Mar-2023	Interpretation
Fixed Assets	£18,646	£11,534	Increase due to tangible asset acquisitions (notably motor vehicles), indicating investment in capacity.
Current Assets	£48,433	£84,096	Significant decrease mainly in debtors and cash, possibly due to tighter receivables management or reduced sales.
Cash at Bank	£6,451	£12,960	Cash reserves halved, a sign of potential liquidity pressure, but still positive.
Current Liabilities	£27,846	£50,753	Current obligations have decreased, improving short-term solvency.
Net Current Assets (Working Capital)	£20,587	£33,343	Reduced but positive, indicating the company can cover short-term debts but with less cushion.
Net Assets (Shareholders’ Funds)	£36,122	£44,129	Decline reflects accumulated losses or deferred tax impact but remains positive, indicating ongoing equity backing.
Deferred Tax Liability	£3,111	£748	Increase suggests timing differences in tax treatment; a cautionary note for future tax cash flow.
Average Number of Employees	5	5	Stable workforce size, implying consistent operational scale.

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3. Diagnosis:

Hull Resin Flooring Ltd is showing symptoms of financial tightening despite being in a growth or investment phase. The company has invested in tangible assets (including significant motor vehicles) which is a positive sign of expanding operational capacity. However, the decline in cash and receivables signals that the company’s cash flow may be under pressure, possibly due to slower collection or lower sales volumes.

The working capital remains positive, meaning the business can meet its short-term obligations, but the shrinking buffer suggests it needs careful cash flow management. The increase in deferred tax liability could indicate timing differences in profit recognition and tax payments, which the company should plan for to avoid surprises.

The decrease in net assets and shareholders' funds, while not alarming, warrants attention as it may indicate that the company is burning through reserves or experiencing losses not fully detailed here (profit and loss account not filed publicly but implied by reduced equity). The company is young, and some level of financial stress is common as it establishes its market presence.

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4. Recommendations:

• Improve Cash Flow Management: Closely monitor debtor payments and reduce days sales outstanding where possible. Consider negotiating better credit terms with customers and suppliers to maintain liquidity.

• Review Deferred Tax Implications: Engage with a tax advisor to understand the reasons behind the increased deferred tax liability and plan for the cash impact when these liabilities crystallize.

• Cost Control and Profitability: Undertake a detailed review of costs and pricing strategies to improve profitability, especially if the decrease in net assets is due to operational losses.

• Asset Utilization: Ensure that new tangible assets, particularly motor vehicles, are efficiently deployed to generate revenue and justify the investment.

• Maintain Adequate Working Capital: Keep a buffer in net current assets to avoid liquidity crises, especially important for small, growing companies.

• Financial Reporting and Transparency: Consider preparing and filing the profit and loss account publicly to provide clearer insight for stakeholders and to help with strategic planning.

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Medical Analogy Summary:
Hull Resin Flooring Ltd shows the "vital signs" of a growing but cash-strained patient. The company has invested in new "organs" (assets), but its "circulatory system" (cash flow) is showing signs of strain, and its "immune system" (equity) has weakened slightly. Without intervention to improve liquidity and profitability, the financial health could deteriorate further.

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