Company Number: NI672521

Analysis Date: 2025-07-29 16:08 UTC

Financial Health Assessment for PAUL DOUGAN & CO LTD (as of 31 May 2024)

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1. Financial Health Score: B

Explanation:
The company shows a solid balance sheet with strong net assets and shareholders' funds relative to its micro-entity size. The absence of current liabilities in the latest year improves liquidity indicators. However, the significant drop in current assets and elimination of current liabilities compared to prior years warrants cautious monitoring. Overall, the financial "vitals" suggest a mostly healthy condition with some symptoms that require attention.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£301,500	Stable long-term investment, consistent over years. Indicates a solid asset base.
Current Assets	£9,183	Sharp decrease from £46,950 in 2023; could indicate reduced liquidity or cash reserves.
Current Liabilities	£0	Eliminated current liabilities, improving short-term solvency and working capital.
Net Current Assets	£9,183	Positive working capital, indicating ability to meet short-term obligations.
Total Assets Less Current Liabilities	£310,683	Stable asset base net of short-term debts.
Net Assets / Shareholders Funds	£310,683	Equity base is strong and stable, showing retained earnings or capital invested.

Additional Observations:

• The company has consistently maintained fixed assets at £301,500, which may represent property or long-term equipment. This "fixed backbone" is stable.
• The drop in current assets from nearly £47k to just over £9k is a "symptom" that suggests cash or short-term receivables have decreased substantially. This could be due to spending on operations or asset acquisition.
• Current liabilities have dropped from £36,500 to zero, a positive sign reflecting no immediate debts or payables, improving liquidity ratios.
• Net current assets remain positive, a "healthy cash flow" sign for short-term obligations, but the sharp changes year-on-year call for deeper monitoring.

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3. Diagnosis

Paul Dougan & Co Ltd’s financial health resembles a patient with a sturdy skeletal frame (fixed assets) but showing signs of fluctuating "blood pressure" in the form of current assets and liabilities. The elimination of current liabilities is a sign of improved short-term financial hygiene, while the decrease in current assets could mean either a strategic use of cash or possibly slower cash inflows.

The company’s equity base is strong and stable, indicating no erosion of shareholder value and a sound capital foundation. The absence of audit requirements under micro-entity rules means limited transparency on profitability and cash flow trends, which is a "blind spot" in diagnosis.

No immediate symptoms of distress such as overdrafts or negative net assets are present. The company appears financially stable but should be mindful of liquidity fluctuations and maintain healthy cash reserves to avoid any sudden "financial fatigue."

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4. Recommendations

• Monitor Liquidity Closely: The decline in current assets requires close attention. Ensure sufficient cash or receivables are maintained to meet operational needs. Consider preparing monthly cash flow forecasts.
• Maintain Working Capital Discipline: With zero current liabilities reported, avoid accumulating short-term debts that could strain liquidity. Keep operations cash-neutral or positive.
• Review Asset Utilization: Fixed assets remain sizeable. Confirm these are contributing effectively to revenue generation and not tying up excessive capital unnecessarily.
• Consider Profit & Loss Transparency: Although exemption from audit applies, consider voluntary internal financial reviews to monitor profitability and cash generation, which are key "vital signs."
• Prepare for Growth or Contingencies: If the company plans to grow or face market fluctuations, build a cash buffer to withstand shocks and maintain operational "health."
• Engage Stakeholders with Clear Reporting: Transparent communication with shareholders and creditors regarding financial position will build confidence and avoid "financial stress" signals.

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