LYON AND SON CONTRACTS LIMITED

Executive Summary

Lyon and Son Contracts Limited shows strong liquidity and positive net assets typical of a healthy micro-sized construction business in its early years. However, a slight decline in net worth and fixed assets signals emerging financial pressures that require careful monitoring and strategic management. With prudent cash flow oversight, profitability analysis, and asset management, the company is well-positioned to sustain stability and pursue growth.

LYON AND SON CONTRACTS LIMITED - Analysis Report

Company Number: 13951948

Analysis Date: 2025-07-20 13:51 UTC

Financial Health Score: B

Lyon and Son Contracts Limited demonstrates a generally sound financial position typical of a young micro-sized construction business, with healthy working capital and positive net assets. However, a slight decline in net assets and fixed assets signals emerging pressures that warrant attention.

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Key Vital Signs

Metric	2025 Value	Interpretation
Fixed Assets	£26,855	Modest investment in long-term assets; slight decline from prior year.
Current Assets	£45,984	Adequate liquid resources, stable from previous year.
Current Liabilities	£13,964	Manageable short-term debts; current ratio approx 3.3 (strong liquidity).
Net Current Assets	£32,020	Positive working capital indicating good short-term financial health.
Creditors Due After One Year	£27,175	Medium-term liabilities present; slightly reduced from prior year.
Net Assets (Equity)	£27,910	Positive net worth but decreased by ~9% from prior year.
Number of Employees	1	Very small scale; owner-operated business.

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Symptoms Analysis

• Liquidity ("Healthy cash flow"): The current ratio (current assets/current liabilities) is approximately 3.3, indicating the company holds sufficient liquid assets to cover short-term obligations comfortably. This is a strong sign of financial "vitality" for operations.

• Asset Base ("Muscle mass"): The fixed assets have decreased by about 21% compared to the previous year, which may suggest asset disposals or lack of reinvestment. While not immediately alarming, it could indicate underinvestment in growth or potential asset aging.

• Leverage ("Pressure on the heart"): Medium to long-term creditors have decreased modestly, reducing financial strain. However, the presence of £27k in liabilities beyond one year shows some reliance on debt, which must be monitored.

• Net Worth ("Overall body strength"): The net assets have decreased from £30,719 to £27,910, a reduction of roughly 9%. This could be due to operating losses or asset write-downs, signaling some financial stress that requires management’s attention.

• Scale and Growth ("Youthful metabolism"): As a company incorporated in 2022 and operating with a single employee (the director), the business is in its infancy with limited operational scale, which naturally limits financial complexity but also presents growth challenges.

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Diagnosis

Lyon and Son Contracts Limited exhibits the financial "vital signs" of a stable micro-enterprise with healthy liquidity and positive equity. The company’s working capital position is robust, indicating it can meet short-term obligations without distress—a critical factor akin to healthy blood pressure in a patient. However, the reduction in net assets and fixed assets suggests emerging "symptoms of distress" that may reflect operational losses, limited reinvestment, or asset disposals. Given its small size and early stage, this could be normal business development volatility but should be carefully monitored to prevent deterioration.

Overall, the company’s financial condition is sound but warrants vigilance to sustain growth and profitability. The business’s financial "immunity" seems intact, but the slight decline in net worth indicates a need for strategic focus on profitability and capital management.

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Recommendations

1. Monitor Cash Flow Regularly: Maintain rigorous cash flow forecasting to ensure liquidity remains strong, especially given the company's small size and limited employee base.

2. Analyze Profitability Drivers: Investigate causes behind the decrease in net assets—review profit and loss trends to identify any operational inefficiencies or unexpected costs.

3. Asset Management: Evaluate fixed asset utilization and consider reinvestment or replacement strategies to avoid operational disruptions due to aging equipment or infrastructure.

4. Debt Management: Continue to manage medium and long-term liabilities prudently to avoid excessive leverage that could strain future cash flows.

5. Growth Planning: Explore opportunities to scale operations cautiously—consider whether hiring additional staff or expanding service offerings could improve revenues and spread fixed costs.

6. Financial Reporting: Maintain timely and accurate financial filings, leveraging micro-entity reporting benefits but ensuring comprehensive internal management accounts for decision-making.

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