L J BRADY ELECTRICAL SERVICES LIMITED

Executive Summary

L J Brady Electrical Services Limited demonstrates a stable but cautious financial position typical of a young micro-entity. Positive net assets and reduced liabilities indicate solvency, yet persistent negative working capital signals liquidity stress that requires careful management. Improving cash flow control and working capital will be crucial to sustain healthy operations and support growth prospects.

L J BRADY ELECTRICAL SERVICES LIMITED - Analysis Report

Company Number: 14328289

Analysis Date: 2025-07-20 13:10 UTC

Financial Health Assessment for L J BRADY ELECTRICAL SERVICES LIMITED

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1. Financial Health Score: C

Explanation:
The company shows stable but modest financial condition for a micro-entity. While net assets are positive and improving slightly, the persistent negative net current assets (working capital deficit) indicates some liquidity strain. The overall financial "pulse" is stable but with symptoms suggesting cautious monitoring is needed.

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

Metric	2024 Value	2023 Value	Interpretation
Fixed Assets	£10,195	£12,743	Slight reduction in long-term assets; normal in small businesses managing minimal equipment.
Current Assets	£3,227	£1,431	Improvement in liquid assets (cash, receivables) showing better short-term resource availability.
Current Liabilities	£4,954	£6,278	Reduction in short-term debts; positive sign of managing payables and obligations.
Net Current Assets (Working Capital)	-£1,727	-£4,847	Still negative but improved, indicating ongoing short-term liquidity pressure but trending better.
Total Assets less Current Liabilities	£8,468	£7,896	Increase reflects improved overall asset base after settling short-term debts.
Net Assets / Shareholders Funds	£8,468	£7,896	Positive equity base growing slightly; company remains solvent and retains owner investment value.

Interpretation:

• The company has a healthy equity base considering its micro size, indicating a solid foundation or owner's capital injection.
• The negative but improving working capital is a symptom of liquidity stress common in small startups, as current liabilities exceed current assets. This could indicate potential cash flow constraints.
• Reduction in fixed assets might suggest asset disposals or minimal reinvestment, which can be normal for a small electrical services company with limited equipment needs.
• Overall, the financial "vitals" show no alarming signs such as insolvency but do suggest continued attention to cash flow management.

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3. Diagnosis: Overall Financial Condition

The company is in a stable but fragile financial state, typical of a micro-entity in its early years (incorporated in 2022). The slightly positive net assets and reduction in liabilities are encouraging, showing the business is maintaining solvency and not accumulating excessive debt.

However, the persistent negative working capital is a "symptom of distress" that could impair day-to-day operations if not addressed. This condition suggests that short-term liabilities currently outstrip current assets, which could lead to difficulties in meeting immediate obligations or seizing growth opportunities without external financing or improved cash inflow.

The company's size (single employee including director) and exemption from audit requirements imply a very lean operation, which may limit financial and operational flexibility.

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4. Recommendations: Actions to Improve Financial Wellness

• Improve Working Capital Management:
  Implement tighter control on receivables collection and optimize payables schedule to improve liquidity. Consider negotiating longer payment terms with suppliers or faster payments from customers.

• Cash Flow Forecasting:
  Develop a rolling cash flow forecast to anticipate shortfalls and manage liquidity proactively, ensuring the company can meet obligations as they fall due.

• Consider External Funding:
  If working capital pressure persists, explore small business financing options such as overdrafts, invoice financing, or small business loans to smooth cash flow cycles.

• Asset Utilization Review:
  Review fixed asset usage and potential to leverage or upgrade equipment to improve operational efficiency without overextending capital.

• Cost Control:
  Monitor and control operating expenses strictly to maintain profitability and conserve cash, especially given the micro scale of operations.

• Regular Financial Monitoring:
  Maintain monthly or quarterly financial reviews to detect early warning signs and adjust strategies accordingly.

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