MARK WILSON SCAFFOLDING LTD

Executive Summary

MARK WILSON SCAFFOLDING LTD is in the early stages of operation with a solid asset base but currently faces liquidity challenges as evidenced by negative working capital and near-zero equity. Immediate focus on cash flow management and potential capital injection is vital to stabilize finances and support sustainable growth. With timely action, the company can improve its financial health and continue operating successfully.

MARK WILSON SCAFFOLDING LTD - Analysis Report

Company Number: 14721149

Analysis Date: 2025-07-20 16:28 UTC

Financial Health Assessment for MARK WILSON SCAFFOLDING LTD (as at 31 March 2024)

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1. Financial Health Score: D

Explanation:
The company’s financial health is currently weak, reflected by negative net current assets (working capital) and near-zero net equity. These symptoms suggest financial stress, particularly liquidity concerns, though the company remains operational with tangible assets as a base. Given it is a newly incorporated business (less than 1.5 years old), early-stage losses and investment are typical, but the current position requires close monitoring and remedial action.

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2. Key Vital Signs (Financial Metrics & Interpretation)

Metric	Value (£)	Interpretation
Debtors (Accounts Receivable)	12,736	Moderate amount of money owed to the company.
Current Liabilities	64,153	Significant short-term obligations due within one year.
Net Current Assets (Working Capital)	-51,417	Negative working capital indicates liquidity pressure; company owes more due soon than it holds in assets.
Fixed Tangible Assets	56,508	Solid investment in vehicles and equipment, a positive asset base.
Total Assets Less Current Liabilities	5,091	Small buffer after covering short-term debts with assets.
Long-term Liabilities	4,000	Loan due after one year; moderate debt burden.
Provisions for Liabilities	1,140	Estimated future outflows; relatively small.
Net Assets (Equity)	-49	Slightly negative equity; shareholders’ funds are nearly zero, indicating accumulated losses or initial funding shortfall.
Share Capital	1	Nominal share capital, typical for a small private limited company.

Additional Context:

• The company employs 2 people (including the director), indicating a very small operation consistent with a micro or small business size.
• The director is the sole significant controller, which centralizes decision-making but also concentrates risk.
• The company is exempt from audit, reflecting its small size.

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3. Diagnosis: What the Financial Data Reveals

• Liquidity Symptoms: The company shows a “symptom of distress” in liquidity due to negative net current assets (£-51,417). This means it currently owes more short-term debts than it has readily available assets to cover them. This can strain day-to-day operations and supplier relationships if not corrected.

• Asset Base: The company holds healthy fixed assets (£56,508), reflecting investment in scaffolding equipment and vehicles necessary for its trade. This is a positive sign but these assets are not easily converted to cash quickly without potential loss in value.

• Equity Position: The negative net assets (-£49) and shareholder funds suggest the company is at a break-even equity level but with very little buffer to absorb losses. This is not unusual for a start-up business but indicates limited financial resilience.

• Profitability & Reserves: The absence of profit and loss reserves and the negative equity suggests the company has likely incurred some operational losses or initial setup costs since incorporation.

• Going Concern: The director’s report confirms the accounts are prepared on a going concern basis, implying management believes the company can continue operating despite current financial strain.

• Debt Profile: The company has both short-term (£21,192) and long-term (£4,000) borrowings. The short-term loans contribute to the liquidity pressure and require careful management.

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4. Prognosis: Future Financial Outlook

Given the company’s early stage, existing negative working capital, and minimal equity cushion, the future financial outlook is cautiously guarded. The company has the tangible assets and presumably operational contract flow (debtors) to generate revenue, but must improve liquidity and profitability to avoid insolvency risk.

If current trends continue without improvement in cash flow management or additional capital injection, the company may face increasing financial stress. However, with proper financial discipline and growth in revenue, the prognosis can improve over the next 12-24 months.

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5. Recommendations: Specific Actions to Improve Financial Wellness

1. Strengthen Liquidity Management:

• Accelerate debtor collections to convert invoices to cash faster.
• Negotiate extended payment terms with creditors to relieve immediate cash pressure.
• Monitor cash flow closely through weekly forecasts to anticipate shortfalls.

2. Capital Injection or Financing:

• Consider additional equity investment from the director or external sources to bolster working capital and net assets.
• Explore short-term financing options with favourable terms to bridge liquidity gaps without excessive cost.

3. Cost Control and Profitability:

• Review operational expenses to identify non-essential costs for reduction.
• Focus on securing profitable contracts, with clear payment terms and margins to improve overall profitability.

4. Asset Utilization:

• Ensure scaffolding equipment and vehicles are optimally used to generate revenue.
• Avoid unnecessary capital expenditure until liquidity improves.

5. Governance and Reporting:

• Maintain timely filing of accounts and returns (already compliant).
• Consider regular financial health check-ups every 6 months to spot issues early.

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Summary with Medical Analogy

MARK WILSON SCAFFOLDING LTD currently shows symptoms of financial stress, mainly liquidity strain akin to a patient with low blood pressure—vital signs (working capital) are below healthy levels. The company has a decent asset "muscle mass" but lacks sufficient "circulating cash flow" to meet immediate obligations comfortably. Early intervention through better cash flow management and possible capital "transfusions" (investment) is critical to avoid deterioration into more serious financial illness.

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