N MAWER BUILDINGS LTD

Executive Summary

N MAWER BUILDINGS LTD currently exhibits strong short-term liquidity but faces significant solvency challenges, highlighted by negative net assets and increasing liabilities. Immediate focus on managing provisions, restructuring debt, and improving profitability is crucial to restoring financial health. Without corrective action, the company risks deeper financial distress despite its operational liquidity.

N MAWER BUILDINGS LTD - Analysis Report

Company Number: 13618445

Analysis Date: 2025-07-20 12:33 UTC

Financial Health Assessment: N MAWER BUILDINGS LTD (As of 30 September 2024)

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1. Financial Health Score: D

Explanation:
The company shows concerning signs of financial distress, primarily due to negative net assets and increasing provisions for liabilities. While it maintains positive working capital, the overall solvency and equity position have deteriorated since the previous year. This score reflects the need for prompt management attention to avoid further decline.

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2. Key Vital Signs:

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	712	837	Low asset base; indicates a light asset structure typical for a micro company.
Current Assets	10,486	9,077	Healthy cash and receivables; slight improvement showing liquidity strength.
Current Liabilities	1,075	1,323	Reduced short-term debts; positive sign for immediate obligations.
Net Current Assets (Working Capital)	9,411	7,754	Strong short-term liquidity; symptomatic of healthy cash flow to cover immediate debts.
Long-Term Creditors	6,000	N/A	New significant long-term debt appears; potential symptom of financing pressure.
Provisions for Liabilities	8,932	6,954	Substantial increase; suggests mounting future obligations or contingent liabilities—cause for caution.
Net Assets / Shareholders Funds	-4,909	1,537	Negative net worth; clear symptom of financial strain and erosion of equity capital.

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3. Diagnosis:

• Liquidity ("Circulation and Pulse"): The company presents a "healthy pulse" with positive net current assets of £9,411, indicating it can meet short-term obligations comfortably. This is a reassuring sign that day-to-day operations are currently supported by sufficient liquid resources.

• Solvency ("Structural Integrity"): The "bones" of the company—its capital structure—are showing signs of weakness. The negative net assets (-£4,909) indicate that total liabilities exceed total assets, a classic symptom of financial distress. This erosion of shareholder funds signals that the company’s cushion against losses has been compromised.

• Rising Provisions and Long-Term Creditors ("Underlying Conditions"): The sharp increase in provisions (from £6,954 to £8,932) alongside new long-term creditors (£6,000) indicates potential liabilities or future costs that may be weighing heavily on the company’s balance sheet. This may reflect pending obligations, legal claims, or deferred expenses that could drain resources if not managed.

• Profitability and Retained Earnings (P&L Reserve): While specific profit and loss data is limited, the negative retained earnings embedded in shareholders’ funds suggest the company has suffered losses or distributions exceeding profits over its lifespan.

• Company Size and Activity: As a micro-entity engaged in building project development since 2021, the modest asset base and workforce (1 employee) align with expectations. However, the financial downturn in net assets over the last year is a red flag for sustainability.

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4. Recommendations:

• Review and Manage Provisions: Conduct a thorough review of the provisions for liabilities. If possible, clarify and, where appropriate, challenge or renegotiate these obligations to reduce their impact.

• Debt Restructuring: The introduction of £6,000 long-term creditors suggests new borrowings or financing arrangements. Evaluate terms and explore opportunities to refinance or restructure debt to improve the balance sheet and reduce interest burden.

• Improve Equity Base: Consider capital injection options—either through shareholder loans, new equity investment, or retained earnings improvement—to restore positive net assets and reinforce financial stability.

• Cash Flow Monitoring: Maintain vigilant management of cash flow to preserve the current strong liquidity position. Early warning signs of cash distress should be addressed proactively.

• Cost Control and Profitability: Investigate operating expenses and project margins to identify cost-saving and revenue-enhancing measures. Improving profitability will help rebuild reserves and offset liabilities.

• Strategic Planning: Develop a medium-term financial plan that addresses the current financial "illness," focusing on returning to a solvent and profitable position.

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