LEEGAL CONSTRUCTION AND CARPENTRY SERVICES LIMITED

Executive Summary

LEEGAL CONSTRUCTION AND CARPENTRY SERVICES LIMITED is in a stable but fragile financial state typical of a young micro-entity. The company has a positive but minimal working capital and very low net assets, indicating limited financial cushion. Close cash flow management and gradual equity building are essential to improve financial resilience and support future growth.

LEEGAL CONSTRUCTION AND CARPENTRY SERVICES LIMITED - Analysis Report

Company Number: 14416118

Analysis Date: 2025-07-29 18:14 UTC

Financial Health Assessment of LEEGAL CONSTRUCTION AND CARPENTRY SERVICES LIMITED

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1. Financial Health Score: C

Explanation:
The company demonstrates a modest financial position typical of a micro-entity in its first full accounting period. The current assets slightly exceed current liabilities, showing a barely positive working capital. However, net assets are very low (£157), indicating minimal equity buffer. The financial "vital signs" suggest a fragile but currently stable condition with limited operational scale and no immediate distress signals.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	14,352	Cash, receivables, or short-term assets are present but modest, reflecting small operating scale.
Current Liabilities	13,385	Short-term obligations nearly match current assets, indicating tight liquidity.
Net Current Assets (Working Capital)	967	Positive but minimal, "healthy cash flow" is fragile; risk if unexpected expenses arise.
Net Assets (Shareholders’ Funds)	157	Very low equity, minimal financial cushion against losses or liabilities.
Average Employees	0	No employees on payroll, possibly subcontracting work, limiting fixed costs but also growth capacity.

• Balance Sheet Structure: The company's assets just cover its liabilities, leaving very limited net assets. This is typical for a newly incorporated micro-company but highlights vulnerability.
• Auditing and Reporting: Exempt from audit, which is common and acceptable for micro-entities but means limited external financial scrutiny.
• Directors and Control: The controlling director holds 75-100% shares and voting rights, suggesting centralized decision-making.

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3. Diagnosis: Financial Condition

The company is like a patient in the early stage of life—young and with modest resources. The "pulse" of current assets over liabilities shows the business is not in immediate distress, but the "symptoms" of very low net assets and minimal working capital suggest a fragile financial state. The absence of employees implies a lean operation, possibly relying on subcontractors or owner labor, reducing fixed overhead but limiting scalability. The company’s financial health is stable but vulnerable to cash flow shocks, delayed payments, or unexpected costs.

There is no indication of overdue filings or regulatory issues, which is a positive sign of compliance "vital signs." However, the small equity base means the company would struggle to absorb losses or invest in growth without external support or increased profitability.

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4. Recommendations

• Improve Liquidity and Working Capital:
  Monitor cash flow closely to maintain or increase the net current assets buffer above £1,000 to reduce risk of liquidity stress.

• Build Equity Over Time:
  Reinvest profits to strengthen shareholders’ funds, providing a financial cushion against downturns or investment needs.

• Consider Employee and Resource Strategy:
  Evaluate if hiring employees or formalizing subcontractor agreements can improve operational capacity and growth potential.

• Regular Financial Reviews:
  Conduct quarterly financial health check-ups to detect early symptoms of distress, such as increasing liabilities or declining assets.

• Plan for Growth and Capital Needs:
  Explore funding options if expansion is planned, as current financial base is too small to support significant growth organically.

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