N W GRAINGER SERVICES LIMITED

Executive Summary

N W GRAINGER SERVICES LIMITED exhibits fragile financial health with minimal working capital and sharply reduced equity, indicating liquidity challenges and potential operating losses. Immediate focus on cash flow management, reducing reliance on director loans, and enhancing profitability is essential to stabilise and improve the company’s financial condition. Regular monitoring and professional guidance will support recovery and sustainable growth.

N W GRAINGER SERVICES LIMITED - Analysis Report

Company Number: 12620431

Analysis Date: 2025-07-20 18:24 UTC

Financial Health Assessment of N W GRAINGER SERVICES LIMITED

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1. Financial Health Score: Grade C

Explanation:
The company shows signs of survival but with noticeable financial strain. Its net current assets are minimal (£3 as of 2024), indicating very tight liquidity, and total equity has sharply decreased from £2,253 in 2023 to £353 in 2024. These "symptoms" suggest a fragile financial condition, akin to a patient with low energy reserves and borderline vital signs requiring careful monitoring and intervention.

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2. Key Vital Signs (Critical Metrics and Interpretation)

Metric	2024 Value	Interpretation
Current Assets	£17,225	Cash and debtors available to meet short-term obligations
Cash	£12,650	Cash "in hand" is moderate but declining from prior year (£17,653)
Debtors	£4,575	Money owed by clients; stable but no improvement
Current Liabilities	£17,222	Short-term debts nearly equal to current assets
Net Current Assets	£3	Working capital virtually zero; signals liquidity risk
Shareholders’ Funds	£353	Equity cushion is very thin, reduced from £2,253 in prior year
Tangible Fixed Assets	£350	Minimal fixed assets, typical for service business
Director Loan	£12,330 (owed by company)	High related-party creditor balance, interest-free and repayable on demand
Number of Employees	2	Small workforce, consistent with micro/small company scale

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3. Diagnosis: What the Financial Data Reveals

The company is like a patient showing borderline vital signs with a precarious balance between assets and liabilities. The nearly zero net current assets in 2024 indicate "symptoms of distress" in liquidity, potentially limiting the company’s ability to cover short-term obligations without relying on external funding or the director’s loan.

The sharp decline in shareholders' funds (equity) from £2,253 to £353 suggests operating losses or withdrawals have significantly eroded the financial "immune system." Although the company remains solvent, the thin equity margin may limit its ability to absorb shocks or invest in growth.

The consistent level of cash and debtors implies that while the company generates some cash inflow, it may be insufficient to fully cover rising liabilities and operational expenses. The director’s loan, a critical source of financing, represents both a lifeline and a potential risk if repayment demands increase or the director’s support is withdrawn.

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4. Recommendations: Specific Actions to Improve Financial Wellness

• Strengthen Liquidity ("Replenish Energy Reserves"):
  Improve cash flow management by accelerating debtor collections and reviewing payment terms with suppliers to ease current liabilities pressure.

• Reduce Reliance on Director Loan:
  Formalise repayment terms or seek alternative financing to reduce the risk of sudden demand for repayment, which could destabilise the company.

• Enhance Profitability:
  Conduct a detailed review of pricing, cost structures, and operational efficiency to arrest equity erosion and rebuild reserves.

• Regular Monitoring of Financial "Vital Signs":
  Implement monthly cash flow forecasts and working capital analysis to detect early symptoms of financial distress.

• Consider External Advice:
  Engage with a financial advisor or accountant to explore restructuring or growth opportunities and ensure compliance with small company filing requirements.

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