NEAT (SW) LIMITED

Executive Summary

NEAT (SW) LIMITED is a financially stable micro-entity exhibiting strong liquidity and positive equity growth since incorporation in 2021. The company’s healthy working capital and solvent position indicate good operational management, although careful monitoring of deferred income and medium-term liabilities is advised to maintain financial wellness. Overall, the outlook is positive with prudent financial stewardship recommended to support sustainable growth.

NEAT (SW) LIMITED - Analysis Report

Company Number: 13295385

Analysis Date: 2025-07-20 13:50 UTC

Financial Health Assessment Report for NEAT (SW) LIMITED

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1. Financial Health Score: B

Explanation:
NEAT (SW) LIMITED demonstrates a solid financial condition typical of a micro-entity in its sector. The company shows strong liquidity, positive net assets, and steady growth in shareholders’ funds, indicating healthy operations. However, the relatively modest net asset base and sizeable accruals/deferred income warrant cautious optimism rather than an A grade.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£58,723	Stable investment in long-term resources; consistent with prior years.
Current Assets	£373,219	Healthy short-term assets, indicating good liquidity.
Current Liabilities	£103,408	Manageable short-term obligations; improved from previous year.
Net Current Assets	£322,598	Strong working capital, a positive sign of operational liquidity.
Creditors (due after 1 year)	£107,944	Medium-term liabilities exist; needs monitoring but not alarming.
Accruals & Deferred Income	£197,855	Significant deferred income; suggests prepayments or ongoing contracts.
Net Assets (Shareholders’ Funds)	£75,522	Positive equity base, increasing steadily (from £30,218 in 2023).
Average Employees	5	Small workforce consistent with micro-entity classification.

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3. Symptoms Analysis and Diagnosis

• Liquidity: The company exhibits a "healthy cash flow" symptom, evidenced by net current assets of £322,598, which means current assets significantly exceed current liabilities. This suggests the business can comfortably cover short-term debts and operational expenses.

• Solvency: Positive net assets (£75,522) confirm the company is solvent, with assets exceeding liabilities. The increase from £30,218 the prior year indicates retained earnings or capital injections improving the company’s financial "immune system."

• Revenue Recognition & Deferred Income: The significant accruals and deferred income (£197,855) point to advanced payments or ongoing contractual work, common in joinery installation businesses. This is not necessarily a sign of distress but a symptom to monitor for proper revenue recognition.

• Leverage: Medium-term creditors (£107,944) represent some financial obligations due beyond one year. While not excessive, the company should manage these carefully to avoid liquidity strain.

• Growth Trajectory: The steady rise in net assets and current assets shows a business in growth mode, healthy for a company incorporated in 2021. The fixed assets remain stable, indicating controlled capital expenditure and asset management.

• Workforce: Maintaining 5 employees is consistent with the company’s micro-category and suggests operational stability without overextension.

Diagnosis:
NEAT (SW) LIMITED presents as a financially stable micro-entity with good liquidity and solvency. There are no immediate "symptoms of distress" such as negative net current assets, declining equity, or excessive short-term liabilities. The business shows positive momentum and prudent financial management.

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4. Prognosis

Given the current financial indicators, the company is well-positioned to maintain operational health over the next 12 months. The robust working capital and positive net assets provide a buffer against unexpected shocks. However, the sizeable accruals and deferred income should be managed carefully to ensure timely revenue recognition and cash flow alignment.

If the company continues its current trajectory, it can expect:

• Continued growth in equity and asset base.
• Stable liquidity supporting operational demands.
• Potential to scale cautiously without overextending liabilities.

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5. Recommendations

• Monitor Deferred Income and Accruals: Ensure that revenue recognition aligns with accounting standards to prevent future earnings volatility or cash flow mismatches.

• Manage Medium-term Liabilities: Although currently manageable, the company should keep an eye on creditor terms and seek to refinance or reduce longer-term debt if possible to improve financial flexibility.

• Maintain Working Capital Discipline: Continue prudent cash management to sustain the strong net current asset position, which is vital for day-to-day operations.

• Plan for Growth: As the company grows, consider investing gradually in fixed assets or workforce to support increased business volume without compromising liquidity.

• Regular Financial Reviews: Conduct periodic financial health check-ups to detect early any symptoms of financial stress, enabling timely corrective actions.

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