Company Number: 13586001

Analysis Date: 2025-07-29 13:03 UTC

Financial Health Assessment: ORCOM CIVVALS AUDIT LIMITED

---

1. Financial Health Score: B

Explanation:
ORCOM Civvals Audit Limited demonstrates a generally healthy financial position with steady growth in net current assets and shareholders’ funds over the past years. The company maintains positive working capital, indicating it can cover short-term obligations comfortably. However, the noticeable reduction in cash reserves in the latest year and relatively significant amounts owed to associates suggest some liquidity management considerations. The company is not in financial distress but could improve cash flow robustness to elevate to an A grade.

---

2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	236,735	238,039	Stable level of assets available within a year, good liquidity base.
Cash at Bank and in Hand	36,836	65,269	Decrease in cash reserve signals tighter immediate liquidity; needs monitoring.
Debtors	199,899	172,770	Increase in trade debtors could impact cash flow if collection is slow.
Current Liabilities	190,267	215,346	Decrease in short-term debts is positive; company is reducing immediate financial obligations.
Net Current Assets	46,468	22,693	Positive and growing working capital ("healthy pulse") indicating improved short-term health.
Shareholders’ Funds	46,468	22,693	Growth in equity reflects accumulated profits and stronger financial foundation.

• Working Capital Ratio (Current Assets / Current Liabilities):
  2024: 1.24 (Healthy, above 1 indicates ability to meet short-term debts)
  2023: 1.11 (Satisfactory but improving)

• Debtor Days Estimate (Debtors / Annual Turnover * 365):
  Exact turnover not provided, but rising debtors warrant attention to ensure timely collections.

---

3. Diagnosis

The company shows symptoms of financial vitality with growing net current assets and shareholders’ funds, akin to a patient recovering strength. The balance sheet reveals no immediate signs of distress such as negative working capital or excessive liabilities. However, the decline in cash reserves from £65k to £37k is a mild symptom that suggests cash flow might be tightening, possibly due to slower debtor collections or increased payments to associates (noted creditors owed to associates dropped but still substantial).

The increase in trade debtors could reflect sales growth or delayed payments, which, if unmanaged, can strain liquidity — similar to a patient with adequate reserves but who is dehydrated. The company is not reliant on external financing or showing signs of insolvency risk.

The directors are qualified chartered accountants, indicating strong financial governance and oversight, which bodes well for ongoing financial health.

---

4. Recommendations

To strengthen financial wellness further and ensure robust liquidity (a "healthy heartbeat" in business terms), the following actions are advised:

1. Improve Cash Flow Management:

   • Tighten credit control to reduce debtor days and accelerate cash inflows.
   • Regular review of aged receivables to proactively address slow payers.

2. Monitor Related Party Transactions:

   • Carefully manage amounts owed to associates to avoid cash drain or concentration risk.
   • Ensure terms with related parties are commercial and transparent.

3. Build Cash Reserves:

   • Aim to increase cash at bank to provide a buffer against unforeseen expenses or market fluctuations.
   • Consider short-term cash flow forecasting to plan for liquidity needs.

4. Maintain Profitability and Equity Growth:

   • Continue focus on profitable contracts and controlling expenses to grow retained earnings further.
   • Regular review of pricing strategy and cost base to maintain healthy margins.

5. Prepare for Growth and Risks:

   • As the company grows, consider formal audit arrangements for transparency and stakeholder confidence.
   • Monitor industry developments and regulatory changes impacting audit/accounting services.

---