OPTI AGGREGATES NW LIMITED

Executive Summary

OPTI AGGREGATES NW LIMITED demonstrates strong recovery and improving financial health, marked by increased liquidity and a fortified equity base. While current financial indicators are positive, ongoing focus on cash flow management and debt reduction will be essential to sustain growth and avoid future financial stress.

OPTI AGGREGATES NW LIMITED - Analysis Report

Company Number: 13164410

Analysis Date: 2025-07-20 16:17 UTC

Financial Health Assessment for OPTI AGGREGATES NW LIMITED

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1. Financial Health Score: B

Explanation:
The company shows solid improvement in its financial position over the most recent year, with a strong recovery from previous working capital deficits and a significant increase in net assets. Despite being a young company (incorporated 2021), its current financial indicators reflect a business emerging from early-stage liquidity challenges. The B grade signals a generally healthy financial condition with room for improvement in managing liabilities and sustaining cash flow.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	61,554	Healthy increase, indicating better liquidity and asset management.
Cash at Bank	25,973	Good cash reserves for operational needs, a positive liquidity sign.
Debtors	25,581	Higher than prior year but manageable; timely collection should be monitored.
Current Liabilities	31,379	Marked reduction vs prior year, improving short-term solvency.
Net Current Assets	30,175	Positive working capital, showing liquidity to cover short-term debts.
Fixed Assets (Net)	88,627	Significant investment in plant and machinery, suggesting capital-intensive operations.
Total Net Assets	66,692	Strong equity position, reflecting retained profits and capital injections.
Share Capital & Reserves	£66,692	Shareholders’ funds have grown substantially, indicating capital strengthening.

Additional Notes:

• The company has a hire purchase liability (long-term debt) of £41,976, which is sizeable but appears well managed relative to assets.
• The issuance of shares at premium during the year has bolstered equity.
• The company employs 2 people, indicating a small, focused operation.

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3. Diagnosis: Financial Condition Analysis

• Liquidity ("Healthy Cash Flow"): The company has transitioned from a negative working capital position in 2023 to a positive £30,175 in 2024. This is a vital sign of recovery and improved short-term financial health. Cash reserves have increased over threefold, reducing symptoms of cash flow stress.

• Solvency ("Strength of the Backbone"): Net assets grew from £4,951 to £66,692 in one year, primarily due to equity injections and retained earnings accumulation. This strengthens the company’s "skeleton," giving it resilience against shocks.

• Leverage ("Managing Burden"): The long-term hire purchase debt is significant but supported by strong fixed assets. However, ongoing careful management of this debt is needed to avoid overstrain.

• Operational Efficiency ("Vital Organ Function"): The rise in debtors and stock suggests increased business activity, but also that cash is tied up in operations. Monitoring debtor days and inventory turnover will be crucial to maintain healthy cash cycles.

• Growth and Investment ("Muscle Building"): The company invested in plant and machinery despite depreciation charges, indicating confidence in future operations and growth prospects.

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4. Recommendations: Steps to Improve Financial Wellness

1. Strengthen Cash Flow Management

   • Implement tighter credit control to reduce debtor days and improve cash conversion.
   • Monitor stock levels to avoid excess inventory tying up funds.

2. Debt Management

   • Plan for gradual reduction of hire purchase liabilities to lower financial burden and interest costs.
   • Explore refinancing options if favorable to reduce long-term costs.

3. Profitability Focus

   • Although profit figures are not disclosed, focus on margin improvements by controlling operating expenses and optimising pricing strategies.

4. Regular Financial Monitoring

   • Maintain up-to-date financial records and conduct periodic reviews to quickly identify any emerging symptoms of financial distress.

5. Strategic Growth Planning

   • Leverage improved balance sheet strength to explore new business opportunities or investments cautiously, ensuring they do not strain liquidity.

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Summary Using Medical Analogies

OPTI AGGREGATES NW LIMITED has moved from a state of liquidity distress (negative working capital) to a healthier financial condition with positive net current assets and increased cash reserves—akin to a patient recovering strength after illness. The company's financial backbone (equity base) has thickened substantially, providing structural support. However, the long-term hire purchase debt is a notable burden that requires management to avoid future strain. Continued vigilance in cash flow and debt management will help maintain this positive trajectory toward robust financial wellness.

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