Company Number: 12921492

Analysis Date: 2025-07-20 11:22 UTC

Financial Health Assessment of JOSH PERRETT PLASTERING LTD

---

1. Financial Health Score: C

Explanation:
The company shows a moderate financial health profile. It maintains positive net assets and shareholders’ funds, but persistent negative net current assets (working capital) indicate liquidity pressures. The financial position is stable but shows symptoms of tight cash flow management and potential short-term financial strain.

---

2. Key Vital Signs

Metric	Latest Value (£)	Trend (Past 3 Years)	Interpretation
Current Assets	7,283	Decreasing	Declining current assets may limit ability to cover short-term liabilities.
Cash at Bank	1,291	Increasing	Cash improved but remains low relative to current liabilities, indicating tight liquidity.
Debtors	5,992	Decreasing	Reduction in amounts owed to the company, possibly better collections or lower sales.
Current Liabilities	8,797	Decreasing	Slight reduction, still higher than current assets — liquidity concern.
Net Current Assets	-1,514	Negative but stable	Negative working capital suggests the company owes more in the short term than it can readily pay.
Total Assets Less Current Liabilities	6,166	Declining	Positive but shrinking net asset base, reflecting cautious solvency.
Shareholders Funds	6,166	Declining	Equity is positive but reduced from prior years, indicating retained earnings are being eroded.

Vital Signs Interpretation:

• Negative net current assets are the chief symptom of short-term financial stress, potentially indicating a “cash flow cold” where the company’s immediate obligations outweigh readily available assets.
• Positive shareholders’ funds show that the company remains solvent overall (healthy heart), but the downward trend signals caution.
• Improving cash balance is a positive sign (improving pulse), but it is still low compared to liabilities, so liquidity remains tight.
• Stable fixed assets suggest the company's capital equipment base is intact, which is good for ongoing operations.

---

3. Diagnosis

JOSH PERRETT PLASTERING LTD presents a financial profile of a small, young company operating in the plastering sector with modest but persistent liquidity challenges. The negative working capital indicates the company is living somewhat “paycheck to paycheck” with funds — current liabilities exceed current assets, suggesting it may face difficulties meeting short-term obligations without timely cash inflows or external support.

The overall net assets and shareholders’ funds remain positive, indicating that the company’s “financial heart” is still beating and it is solvent on a balance sheet basis. However, the gradual erosion of equity and shrinking net assets reflect some stress, possibly from retained losses or cash flow pressures.

The company’s reliance on debtors for the bulk of its current assets poses a risk if collections slow or customers delay payments. The low cash reserves underline the need for careful working capital management to avoid liquidity crises.

---

4. Recommendations

To improve financial wellness, the company should consider the following actions:

• Enhance Cash Flow Management:
  Accelerate debtor collections through stricter credit control and incentivize early payments to boost cash reserves, easing the tight liquidity symptoms.

• Negotiate Payment Terms:
  Work with suppliers and creditors to extend payment terms where possible, reducing current liabilities pressure and improving working capital (less immediate cash outflow).

• Monitor and Reduce Costs:
  Analyze overheads and operational costs critically to conserve cash and improve profitability, preventing further erosion of shareholders’ funds.

• Build Cash Reserves:
  Aim to increase cash holdings through better cash flow forecasting and financial discipline, creating a buffer against short-term shocks.

• Consider External Financing:
  If working capital constraints persist, explore short-term financing options such as overdrafts or invoice financing to maintain a healthy cash flow pulse.

• Regular Financial Reviews:
  Establish monthly review of key financial metrics to detect early warning signs and proactively manage liquidity and solvency risks.

---