Company Number: 15112890

Analysis Date: 2025-07-20 11:33 UTC

Financial Health Assessment Report: MJL ROOFING LIMITED

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1. Financial Health Score: B

Explanation:
MJL ROOFING LIMITED demonstrates a solid financial foundation for a newly incorporated micro-entity. The company shows positive net assets and a manageable current asset-to-liability position. The financials suggest a healthy start, though the negative net current assets indicate some liquidity stress that should be addressed promptly. Overall, the company is financially sound but requires careful cash flow management to maintain stability.

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2. Key Vital Signs

Vital Sign	Value	Interpretation
Fixed Assets	£29,148	Indicates modest investment in long-term roofing equipment/assets, typical for a start-up in the trade industry.
Current Assets	£32,535	Cash, receivables, and stock available to cover short-term obligations.
Current Liabilities	£37,914	Short-term debts slightly exceed current assets, showing a liquidity gap.
Net Current Assets	-£5,379	Negative working capital—a symptom of potential cash flow strain. Needs monitoring to avoid financial distress.
Total Assets less Current Liabilities	£23,769	Reflects the company's buffer after paying off immediate debts; a positive value signifying overall solvency.
Net Assets (Shareholders' Funds)	£23,769	Positive equity indicating the business is solvent and has a cushion to absorb shocks.
Average Number of Employees	4	Small workforce, appropriate for micro-entity size and industry.

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3. Diagnosis: Financial Condition Overview

Symptoms Analysis:

• The company has positive net assets, reflecting a good capital base for its early stage, which is a healthy sign of financial strength.
• However, the negative net current assets indicate the company owes more in short-term liabilities than it holds in current assets. This "symptom of distress" could lead to cash flow difficulties if not managed carefully, particularly for a business in the roofing sector where upfront material and labour costs are common.
• The balance sheet shows the company is solvent but needs to improve liquidity to ensure smooth operational functioning.
• The director’s full ownership and active role suggest strong control and potentially quick decision-making ability, which is beneficial for addressing financial issues promptly.
• Being a micro-entity with four employees aligns with the company’s size and industry norms, indicating operational scale is appropriate currently.

Overall Diagnosis:
MJL ROOFING LIMITED is in a stable financial state with a healthy capital base but shows early warning signs of liquidity stress due to negative working capital. This is not uncommon for a young company but requires attention to avoid cash flow problems that could escalate into financial distress.

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4. Recommendations for Financial Wellness Improvement

1. Improve Working Capital Management:

   • Accelerate collection of receivables and review credit terms with customers to improve cash inflows.
   • Negotiate better payment terms with suppliers to delay cash outflows where possible.
   • Monitor cash flow closely with weekly forecasts to anticipate and manage short-term liquidity needs.

2. Build Cash Reserves:

   • Aim to increase cash holdings through controlled expenses and possibly short-term financing options to avoid cash crunches.

3. Cost Control and Efficiency:

   • Analyze operating expenses, particularly labour and materials costs, to identify potential savings without compromising quality.
   • Implement budgeting and cost tracking to stay within financial limits.

4. Plan for Growth:

   • As the company grows, consider increasing fixed assets strategically to improve capacity and competitiveness, funded by retained earnings or external financing.

5. Regular Financial Review:

   • Conduct quarterly financial health check-ups to track key indicators and adjust strategies proactively.
   • Seek professional advice if liquidity issues persist or worsen.

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