OBAY HOMES LIMITED

Executive Summary

OBAY HOMES LIMITED shows a healthy financial position with positive net assets and good liquidity, signaling solid financial stability for a young company. However, the absence of detailed profitability data and reliance on debtors warrants cautious monitoring of cash flows and revenue recognition. Strengthening profitability tracking and transparency will support sustainable growth and early identification of financial challenges.

OBAY HOMES LIMITED - Analysis Report

Company Number: 13528744

Analysis Date: 2025-07-20 18:36 UTC

Financial Health Assessment for OBAY HOMES LIMITED

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1. Financial Health Score: B

Explanation:
OBAY HOMES LIMITED displays solid signs of financial stability for a young private limited company in the development of building projects sector. The company has moved from a marginal net asset position in 2023 (£160) to a healthy net asset base of £54,479 in 2024. Current assets comfortably exceed current liabilities, indicating positive working capital. However, limited profitability details and lack of turnover disclosures suggest moderate risk and room for improvement. Hence, a grade B reflects a generally healthy company with some cautionary aspects.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£121,000	Healthy level of short-term assets primarily in debtors, indicating expected cash inflows.
Current Liabilities	£66,521	Manageable short-term debts, less than current assets, supporting good liquidity.
Net Current Assets	£54,479	Positive working capital ("healthy cash flow potential"), suggesting ability to meet obligations.
Net Assets	£54,479	Positive shareholders’ equity, implying company value exceeds its liabilities ("healthy balance sheet").
Shareholders’ Funds	£54,379	Reflects accumulated retained earnings and equity capital, showing growth from prior years.
Average Employees	2	Small team consistent with a micro/small enterprise, keeping overheads low.
Account Category	Unaudited Abridged	Limited disclosure, typical for small companies, but restricts full insight into profitability.
Turnover	Not disclosed	Lack of turnover data is a gap—turnover trends are critical “vital signs” for revenue health.

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3. Diagnosis

• Liquidity and Solvency:
  The company demonstrates good liquidity with current assets nearly double current liabilities. This "healthy cash flow" symptom suggests OBAY HOMES can comfortably cover short-term debts. Positive net assets and shareholders’ funds also indicate solvency, showing the company’s value exceeds its debts.

• Growth and Stability:
  The increase in net assets from £160 in 2023 to £54,479 in 2024 reflects retained earnings accumulation or capital injection, a positive sign of business growth and financial strengthening. The early years show volatility (negative net assets in 2021), typical for start-ups in development sectors.

• Profitability and Revenue Recognition:
  Absence of turnover and profit figures limits the ability to assess revenue generation and operational profitability fully. The company recognizes turnover based on contract completion stages, a prudent revenue recognition policy, but actual income data is missing from filings.

• Operational Scale:
  The company remains small with two employees and operates under the micro/small company filing regime. This keeps administrative burdens low but may limit economies of scale.

• Governance and Control:
  Directors and Persons with Significant Control are stable, resident in England, and no adverse records noted, an indicator of sound management governance.

• Risk Factors:
  Without audit and abridged accounts, there is limited transparency on potential liabilities, contingent risks, or detailed financial health issues. Also, the company’s reliance on debtors as the main current asset may pose risks if collections slow.

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4. Recommendations

1. Increase Transparency and Reporting Detail:
   Consider moving beyond abridged accounts or providing management accounts internally to stakeholders for clearer insight into profitability and cash flow trends—this would detect “symptoms of distress” early.

2. Focus on Cash Collection:
   Since current assets are mainly debtors, ensure robust credit control to maintain “healthy cash flow” and avoid liquidity crunches.

3. Profitability Monitoring:
   Track and report turnover and profit metrics regularly to assess the core business health beyond balance sheet strength.

4. Plan for Growth:
   With positive net assets and working capital, explore opportunities for scaling operations or securing finance for expansion if aligned with strategic goals.

5. Maintain Compliance and Timely Filings:
   Continue timely submission of accounts and confirmation statements to avoid penalties and maintain good standing with Companies House.

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