L A WALSH JOINERY AND DEVELOPMENT LTD.

Executive Summary

L A Walsh Joinery and Development Ltd. has made significant strides from a precarious financial position in 2023 to a much healthier state in 2024, with improved liquidity and a strong equity base. While the company maintains some long-term debt and provisions that require careful management, its overall financial health is stable and improving. Continued focus on cash flow management, debtor collections, and prudent debt management will support sustained financial wellness and growth.

L A WALSH JOINERY AND DEVELOPMENT LTD. - Analysis Report

Company Number: 13478047

Analysis Date: 2025-07-29 13:31 UTC

Financial Health Assessment Report
Company: L A WALSH JOINERY AND DEVELOPMENT LTD.
Assessment Date: Financial year ended 30 June 2024

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1. Financial Health Score: Grade B

Explanation:
L A Walsh Joinery and Development Ltd. shows solid improvement in its financial health over the latest year, demonstrating stronger liquidity, positive working capital, and a significant increase in net assets. The company moved from a precarious position in 2023 with net current liabilities and very low shareholders' funds to a healthier state in 2024 with positive net current assets and a substantially increased equity base. However, the presence of hire purchase debts and provisions for liabilities indicates some ongoing financial commitments that require careful management. Overall, the company is financially stable but should continue to monitor and manage its liabilities carefully to maintain this health.

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2. Key Vital Signs (Critical Metrics and Interpretation):

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	44,907	7,353	Increased significantly, indicating more liquid and short-term assets available.
Cash at Bank	12,527	306	Healthy cash position improves liquidity and ability to meet immediate obligations.
Debtors	32,380	7,047	Substantial increase, suggesting more revenue due but requires monitoring for collectability.
Current Liabilities	30,289	18,952	Increased, partly due to higher taxation and social security liabilities noted.
Net Current Assets	14,618	(6,510)	Shift from negative to positive working capital—critical sign of improved short-term health.
Net Assets / Shareholders’ Funds	14,448	956	Substantial increase reflects accumulation of retained earnings and improved equity.
Fixed Assets (Tangible)	18,937	28,775	Decline due to depreciation and reclassification; indicates asset aging or disposal.
Hire Purchase Debt (Total)	18,951	23,185	Slight reduction, but still a significant long-term liability that must be managed.
Provisions for Liabilities	4,735	2,357	Increase suggests anticipated future expenses or contingent liabilities.

Interpretation of Vital Signs:

• Liquidity: Improved markedly with cash and current assets rising and current liabilities increasing moderately. Positive net current assets ("healthy cash flow environment") means the company can cover short-term debts comfortably.
• Solvency: Net assets increased more than 15-fold, indicating stronger financial foundation and cushion against losses.
• Debt Management: Hire purchase liabilities remain sizable but show a downward trend, indicating controlled leveraging.
• Asset Utilization: Tangible fixed assets decreased, possibly due to depreciation or asset disposal, which may affect operational capacity if not replenished.
• Profitability Inference: Retained earnings growth implies profitability or capital injections, though absence of income statement limits detailed margin analysis.

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3. Diagnosis: Overall Financial Condition Assessment

L A Walsh Joinery and Development Ltd. is showing clear signs of recovery and strengthening after a challenging previous year. The "symptoms of distress" seen in 2023—negative working capital and minimal equity—have been addressed effectively, resulting in a "healthy cash flow" and solid equity base by mid-2024. The company’s ability to increase its debtor balances and cash indicates growing business activity and improved collections.

However, the ongoing presence of hire purchase debt and increased provisions indicates some financial "stress points" or commitments that need monitoring. The reduction in fixed assets suggests the company may have sold or fully depreciated some equipment, which might necessitate future capital expenditure to sustain operations.

The company’s small size and industry (specialized joinery and construction activities) suggest it is in a sector sensitive to cash flow cycles and supplier payments; positive working capital is crucial here and currently in place. The absence of an income statement prevents a full profitability analysis, but the growth in retained earnings and net assets is encouraging.

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4. Recommendations: Actions to Improve Financial Wellness

• Maintain Strong Cash Management: Continue to monitor cash flow closely to ensure the company can meet both short-term liabilities and scheduled hire purchase repayments without strain.
• Enhance Debtor Collections: With debtors increasing significantly, review credit control policies and accelerate collections to avoid potential bad debts, which could undermine liquidity.
• Manage Long-Term Debt Prudently: Explore opportunities to refinance or reduce hire purchase obligations to lower financial risk and interest costs.
• Asset Replacement Planning: Develop a capital expenditure plan to replace or upgrade tangible fixed assets to maintain operational efficiency and competitive edge.
• Contingency Provision Review: Regularly re-assess provisions for liabilities to ensure they are adequate but not excessive, freeing up resources if possible.
• Profitability Tracking: Even though the income statement isn’t filed, internally track profitability and margins carefully to detect any emerging issues early.
• Seek Advisory Support: Engage financial advisors or accountants periodically for strategic financial planning and tax optimisation, especially given the growing scale of the business.

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