MIKE'S WELDING & FABRICATION LIMITED

Executive Summary

Mike's Welding & Fabrication Limited shows a stable and positive financial position for a newly incorporated micro business, with sufficient liquidity and positive net assets. While currently operating at a small scale with limited turnover visibility, the company is financially sound with no immediate signs of distress. Strategic focus on revenue growth, cash reserve building, and enhanced reporting will improve its financial resilience and support future expansion.

MIKE'S WELDING & FABRICATION LIMITED - Analysis Report

Company Number: 14720456

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

Financial Health Assessment of Mike's Welding & Fabrication Limited

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1. Financial Health Score: B-

Explanation:
Mike's Welding & Fabrication Limited demonstrates a cautious but stable financial position for its first year of trading. The business shows healthy net current assets and positive shareholders’ funds, indicating a sound foundation. However, the absolute size of the financials is very small, which is typical for a recently incorporated micro/small enterprise. The limited scale and early stage impart some vulnerability, hence a B- grade reflects satisfactory health with room to strengthen operational cash flow and build reserves.

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2. Key Vital Signs

Vital Sign	Value (£)	Interpretation
Current Assets	2,177	Entirely in cash, which is positive for liquidity (no stock or receivables yet).
Current Liabilities	818	Low level of short-term obligations relative to cash reserves.
Net Current Assets	1,359	Positive working capital indicates ability to cover short-term debts comfortably.
Net Assets (Equity)	1,359	Positive net worth, showing the business is not in deficit at this stage.
Share Capital	1	Minimal initial equity investment; most funds are retained earnings/profit reserve.
Number of Employees	1	Sole director/employee structure suggests limited operational scale.
Account Category	Total Exemption Full	Small company with simplified reporting, typical of startups or micro businesses.
Turnover	Not disclosed	No turnover detail provided, likely limited or in early development phase.

Interpretation:

• The company exhibits a "healthy cash flow" symptom insofar as cash exceeds liabilities, indicating no immediate liquidity stress.
• The small scale and absence of turnover figures may signal "symptoms of infancy" — the company is still in early growth or setup phase.
• No audit requirement and exemption filing status are typical for a micro entity, but limit transparency on profitability or operational efficiency.

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3. Diagnosis

Mike's Welding & Fabrication Limited presents financial "vital signs" consistent with a nascent business in the repair of fabricated metal products. The positive net current assets and shareholders' funds reflect no immediate financial distress or over-leverage. The cash position is sufficient to cover current liabilities, indicating "healthy liquidity."

However, the lack of disclosed turnover and minimal equity capital suggest the business is still establishing its revenue base and operational scale. The reliance on a single director and employee points to limited human resources and capacity constraints, which may affect growth and resilience.

No audit and limited financial disclosures mean diagnostic depth is constrained; nonetheless, there are no "red flags" such as negative net assets, overdue filings, or evidence of financial distress. The company is financially stable but at an early stage, requiring careful management to develop sustainable revenue streams and build robust reserves.

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4. Recommendations

To improve financial wellness and strengthen the business's financial health, consider the following actions:

• Develop Revenue Streams: Focus on increasing turnover by securing contracts or expanding client base. Tracking turnover and profitability will provide clearer health metrics.
• Build Cash Reserves: Maintain and grow cash reserves to buffer against cyclical downturns or unexpected expenses. Healthy cash flow management is crucial.
• Monitor Working Capital: Continue to ensure current assets exceed current liabilities comfortably to avoid liquidity crunches.
• Plan Capital Injections: Consider additional equity or finance injections if expansion or equipment investment is needed to scale operations.
• Enhance Financial Reporting: Even if exempt from audit, preparing management accounts and profit & loss statements will aid decision-making and external stakeholder confidence.
• Governance and Capacity: As the sole director and employee, evaluate whether bringing in additional expertise or staff could mitigate operational risk and support growth.
• Compliance Vigilance: Keep up timely filings and regulatory compliance to avoid penalties or reputational harm.

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