Company Number: 13644630

Analysis Date: 2025-07-19 12:53 UTC

Financial Health Assessment of J.W.H PLASTERING LTD

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1. Financial Health Score: D

The company currently exhibits signs of financial distress, reflected in weakened net assets and working capital. The significant decline in net assets from the previous years and a sharp drop in net current assets indicate potential liquidity challenges. The score "D" reflects a cautious outlook needing urgent attention to stabilize financial health.

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2. Key Vital Signs

Metric	2024 Value (£)	2023 Value (£)	Interpretation
Fixed Assets	4,787	4,210	Slight increase, stable investment in long-term assets.
Current Assets	24,441	23,865	Modest growth, mostly cash/debtors/stock.
Current Liabilities	23,680	20,333	Increased short-term debts, pressure on liquidity.
Net Current Assets (Working Capital)	761	3,532	Drastic decline; indicates tightening short-term liquidity.
Creditors >1 year	5,028	6,526	Long-term liabilities reduced, but still material.
Net Assets (Shareholders’ Equity)	520	1,216	Sharp fall, eroding equity base—potential solvency concerns.
Number of Employees	2	2	Stable staffing level for micro business.

Interpretation:

• Working Capital (Net Current Assets): The "healthy cash flow" of the company seems compromised. The sharp decline from £3,532 to £761 signals the company might struggle to meet short-term obligations.
• Net Assets: The drastic drop from £1,216 to £520 is a "symptom of distress," indicating accumulated losses or depletion of reserves.
• Current Liabilities rising: Increasing creditors due within one year suggest increased reliance on short-term financing or delayed payments.
• Fixed Assets stable: The company maintains its asset base, which is positive but not enough to offset liquidity issues.

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3. Diagnosis

J.W.H PLASTERING LTD is showing "symptoms of financial strain" primarily in liquidity and capital erosion. While the company is still active and operational with stable fixed assets and staffing, the declining net current assets and shareholders’ funds are concerning.

Possible underlying causes:

• Increased short-term liabilities may indicate cash flow management issues.
• Declining equity suggests the company may have incurred losses or withdrawn capital.
• The very low net assets (£520) relative to liabilities may risk creditor confidence and limit borrowing capacity.

Given the company is a micro-entity and relatively young (incorporated in 2021), it might be facing the typical early growth pains but must address liquidity soon to avoid deterioration into insolvency risk.

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4. Recommendations

• Improve Cash Flow Management: Tighten controls on receivables and payables to enhance liquidity. Consider negotiating longer payment terms with creditors or faster collections from customers.
• Review Cost Structure: Assess fixed and variable costs to identify potential savings or operational efficiencies to restore profitability.
• Strengthen Equity Base: Directors or shareholders might consider injecting additional capital or retaining profits to rebuild net assets.
• Monitor Debt Levels: Avoid accumulation of short-term debt; explore longer-term financing options if needed to stabilize the balance sheet.
• Regular Financial Monitoring: Implement monthly financial reviews focusing on cash flow forecasts and working capital to detect early warning signs.
• Seek Professional Advice: Engage with a financial advisor or insolvency practitioner early if cash flow pressures persist to explore restructuring options.

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