PARSLEY CARPENTRY & JOINERY LTD

Executive Summary

PARSLEY CARPENTRY & JOINERY LTD exhibits typical early-stage financial characteristics with a solid asset base but strained liquidity due to high short-term liabilities. Focused cash flow management and cost control are essential to improve financial stability and support sustainable growth.

PARSLEY CARPENTRY & JOINERY LTD - Analysis Report

Company Number: 14574065

Analysis Date: 2025-07-29 19:00 UTC

Financial Health Assessment for PARSLEY CARPENTRY & JOINERY LTD

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1. Financial Health Score: C

Explanation:
The company shows an early-stage financial structure typical of a start-up business with limited operating history. The positive net assets and shareholders' funds are encouraging, but the significant negative working capital and high short-term liabilities relative to cash indicate liquidity stress. This results in a cautious "C" grade reflecting moderate health with room for improvement.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets (Net Book Value)	41,614	Good investment in plant, machinery, vehicles, and intangible assets, suggesting established infrastructure.
Current Assets (Cash)	6,030	Low cash reserves relative to liabilities, indicating tight liquidity.
Current Liabilities	33,387	High short-term obligations, primarily other creditors, posing a risk to immediate solvency.
Net Current Assets (Working Capital)	-27,357	Negative working capital indicates potential cash flow challenges and risk of short-term distress.
Net Assets / Shareholders' Funds	14,257	Positive equity base reflects some retained earnings or capital injection, a foundation for growth.
Profit and Loss Reserve	14,157	Retained earnings or accumulated profits contributing to equity; good sign for a young company.

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3. Diagnosis

Symptoms Analysis:

• Liquidity Strain: The company’s current liabilities exceed current assets by a large margin, indicating "symptoms of distress" in day-to-day cash management. This could mean challenges in meeting short-term obligations without securing additional funding or improving cash collections.

• Asset Base vs. Cash Flow: The company has invested in tangible and intangible assets (goodwill, machinery, vehicles), which is a positive "healthy infrastructure" sign. However, these are fixed assets and not easily liquidated to meet immediate cash needs.

• Capital Structure: Equity (shareholders’ funds) is positive but modest. The small amount of called-up share capital (£100) coupled with accumulated profits suggests the company is at an early stage but has begun to generate some retained earnings.

• Operational Scale: With one employee and a single director who is also the sole significant controller, the company has a lean structure, which is typical for a micro enterprise in joinery installation. This may limit operational capacity but keeps overheads low.

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4. Recommendations

To improve financial wellness and reduce risk:

• Boost Liquidity:

  • Accelerate cash inflows by improving debtor collection practices.
  • Negotiate extended payment terms with creditors to ease short-term cash pressure.
  • Consider short-term financing options (overdraft, invoice discounting) to bridge the working capital gap.

• Cost Control & Profitability:

  • Review operational costs to ensure expenditures align with revenues, especially on overheads and capital expenditure.
  • Monitor margins on contracts carefully to avoid losses that could erode the profit and loss reserve.

• Financial Planning:

  • Prepare detailed cash flow forecasts to anticipate liquidity needs and avoid surprises.
  • Schedule regular financial reviews to track performance against budgets.

• Growth & Capital:

  • Explore opportunities for incremental capital injections or loans to strengthen financial resilience.
  • Consider expanding client base to increase revenue streams and improve cash flow stability.

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Executive Summary

PARSLEY CARPENTRY & JOINERY LTD is a newly established private limited company with a solid asset base but facing liquidity challenges evidenced by negative working capital. While the company has started to build retained earnings, it must prioritize improving cash flow management and controlling short-term liabilities to avoid financial strain. With prudent financial planning and operational discipline, the company has potential to stabilize and grow its financial health.