Company Number: 13274172

Analysis Date: 2025-07-20 17:49 UTC

Financial Health Assessment: N & G Groundworks Ltd (Year ending 31 March 2024)

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1. Financial Health Score: B

Explanation:
This company demonstrates a generally stable financial condition with positive net assets and improving equity compared to previous years. The balance sheet shows adequate working capital and healthy growth in tangible assets. However, the presence of relatively high borrowings and some concentration in related party loans suggests caution. The company is not in distress but should monitor liquidity and leverage closely to maintain its financial wellness.

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2. Key Vital Signs

Metric	2024 Figure (£)	Interpretation
Net Assets	73,036	Positive and more than doubling from £33,579 in 2023, indicating strengthening equity.
Net Current Assets (Working Capital)	102,990	Positive working capital suggests the company can cover short-term liabilities comfortably.
Cash at Bank	118,324	Healthy cash balance, significantly up from £17,347 last year, indicating improved liquidity.
Debtors	320,692	High receivables, which need to be monitored for timely collection to maintain cash flow.
Current Liabilities	409,226	Substantial but covered by current assets; watch for concentration in related party debts.
Long-term Borrowings	131,641	Moderate level of debt; hire purchase contracts indicate asset financing.
Retained Earnings	72,939	Growing retained profits signify operational profitability over time.
Share Capital	97	Minimal share capital typical for small private companies; equity mainly from retained earnings.

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3. Diagnosis: Financial Health Overview

• Liquidity ("Pulse"): The company shows a strong pulse with a positive net current asset position (£102,990) and a robust cash reserve (£118,324). This "healthy cash flow" indicates the firm can meet its short-term obligations without strain, a vital sign of financial vitality.

• Solvency ("Heart Strength"): Net assets have improved substantially from a negative position in 2021 (£-53,832) to a positive £73,036 in 2024. This improvement resembles a recovering heart, now pumping stronger equity into the business. The company is solvent, with assets comfortably exceeding liabilities.

• Debt Levels ("Respiratory System"): Borrowings totaling nearly £188,000 (short and long term combined) suggest the company is using leverage to finance growth and assets (notably plant and machinery). While gearing is moderate, the presence of hire purchase agreements is typical in construction but requires ongoing management to avoid overextension.

• Receivables and Related Party Transactions ("Circulatory System"): Trade debtors are significant (£159,919), and combined with other debtors (£160,773), the company has a large amount tied up in receivables. Additionally, loans to and from related parties (£42,341 and £13,554 respectively) indicate internal financial flows that should be transparent and carefully managed to prevent liquidity bottlenecks.

• Operational Footing ("Muscle Strength"): The company is expanding tangible assets (from £49,963 to £135,446), signaling investment in operational capacity—a positive sign of growing business strength.

Overall, the company is showing signs of recovery and growth after initial losses and negative equity at inception. The financial "vital signs" are mostly robust, though the business should monitor debt levels and debtor collections closely to maintain this healthy trajectory.

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4. Recommendations: Improving Financial Wellness

• Enhance Debtor Management: Implement stricter credit control and faster collection procedures to reduce the amount tied up in receivables. This will improve cash flow and reduce the risk of bad debts ("symptoms of distress").

• Monitor Borrowing Levels: While current debt is manageable, continue to assess the cost of hire purchase agreements and other borrowings. Aim to refinance or reduce debt where possible to lower interest burdens and improve financial "lung capacity."

• Manage Related Party Loans Transparently: Ensure clear documentation and repayment plans for loans to and from related parties to avoid potential liquidity pressures or governance concerns.

• Maintain Healthy Cash Reserves: Continue building cash reserves to buffer against potential market volatility or delays in payment, maintaining the company’s "immune system" against financial shocks.

• Regular Financial Reviews: Conduct quarterly financial check-ups to track key metrics and identify early warning signs of trouble, akin to routine medical check-ups.

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