Company Number: 14555181

Analysis Date: 2025-07-19 12:26 UTC

Financial Health Assessment: MANSON PLUMBING & HEATING LIMITED

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1. Financial Health Score: C

Explanation:
The company shows modest financial footing typical for a micro-entity in the plumbing and heating installation sector. While it maintains positive net assets and shareholders’ funds, there are symptoms of cash flow strain indicated by negative net current assets (working capital deficit) over the last two years, though improving in the latest year. The score reflects a company that is surviving but with underlying liquidity risks that require attention.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	13,082	17,018	Slight decrease in long-term assets; not a major concern for this service-focused business.
Current Assets	31,932	93,166	Significant decline in short-term liquid assets; could indicate reduced cash or receivables.
Current Liabilities	32,583	95,614	Current debts have decreased sharply, which is positive for short-term obligations management.
Net Current Assets (Working Capital)	-651	-2,448	Negative but improving, indicating a slight shortfall in covering short-term liabilities.
Total Assets less Current Liabilities	12,431	14,570	Positive net assets, showing the company’s equity exceeds its liabilities.
Shareholders’ Funds	12,431	14,570	Represents owners’ equity; steady but declining slightly, suggesting retained losses or drawdowns.

Additional Context:

• The company has 2 employees on average, consistent with a micro-entity.
• No audit requirement due to size, meaning financial statements rely on internal controls and director oversight.
• The company is active and not in liquidation or administration.
• Directors hold significant control with roughly equal shareholdings.

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3. Diagnosis: What the Financial Data Reveals

• Cash Flow and Liquidity: The persistent negative net current assets point to a "symptom of distress" in short-term liquidity. The company’s current assets (cash, receivables, stock) are just slightly less than its current liabilities (bills, payables, short-term debt), indicating tight cash flow. However, the improvement from -£2,448 to -£651 suggests some management of this risk.

• Capital Structure and Solvency: The company maintains positive shareholders’ funds and total net assets, akin to a heartbeat still strong enough to sustain operations. However, the slight decline in equity signals that profitability or retained earnings may be under pressure or funds are being drawn down.

• Asset Management: Fixed assets are low and stable, appropriate for a service company primarily relying on labor rather than capital-intensive equipment. The reduction in fixed assets is minor and unlikely to impact operational capacity.

• Growth and Scale: As a micro-entity incorporated in late 2022, the company is in an early growth phase. The financials reflect typical start-up challenges such as managing working capital and cash flow.

• Risk Factors: The company must monitor liquidity closely to avoid cash crunches that could impair its ability to pay suppliers or staff, which are critical for operational continuity.

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4. Recommendations: Steps to Improve Financial Wellness

• Improve Working Capital Management:

  • Speed up collection of receivables to boost current assets (cash inflows).
  • Negotiate better payment terms with suppliers to extend payables without damaging relationships.
  • Maintain a cash buffer to absorb short-term shocks.

• Cost Control and Profitability Enhancement:

  • Review overheads and operational expenses to increase profitability and rebuild reserves.
  • Explore pricing strategies to improve margins without losing competitiveness.

• Financial Planning and Forecasting:

  • Implement regular cash flow forecasting to anticipate periods of tight liquidity and plan accordingly.
  • Consider short-term financing options (e.g., overdrafts or invoice finance) to smooth working capital cycles if needed.

• Growth with Caution:

  • Manage expansion carefully to avoid overextending financial resources.
  • Focus on building a strong client base and repeat business to stabilize revenue.

• Governance and Reporting:

  • Although audit exemption applies, consider voluntary internal reviews to ensure accuracy and early identification of financial issues.
  • Maintain clear records and compliance with filing deadlines to avoid penalties and maintain credibility.

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