PLASWAY PANELS LIMITED

Executive Summary

Plasway Panels Limited shows a solid financial foundation with positive working capital, growing equity, and manageable liabilities, indicating stable and healthy financial health. To enhance its financial wellness, the company should focus on improving cash reserves and inventory management as it grows. Overall, the outlook is positive with prudent financial management supporting sustainable business development.

PLASWAY PANELS LIMITED - Analysis Report

Company Number: 13123584

Analysis Date: 2025-07-29 21:00 UTC

Financial Health Assessment: PLASWAY PANELS LIMITED

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1. Financial Health Score: B

Explanation:
PLASWAY PANELS LIMITED demonstrates solid financial stability with positive net current assets and growing shareholder funds over the last three years. The company maintains a healthy working capital position and shows consistent incremental growth in net assets, indicating prudent management and sound operational performance. However, cash balances are relatively modest, and the business is still in early growth stages (incorporated 2021), which introduces some risk and limits the score from reaching an 'A'.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£9,044	Growing asset base, primarily inventory and cash
Cash at Bank	£2,254	Cash reserves are positive but modest; manageable liquidity
Current Liabilities	£1,700	Low short-term obligations relative to assets
Net Current Assets	£7,344	Strong positive working capital, indicates ability to meet short-term debts comfortably
Net Assets / Equity	£7,344	Gradually increasing, reflecting retained earnings and capital growth
Share Capital	£100	Minimal; company funded mainly through retained earnings
Employee Count	4 (2024)	Small workforce consistent with micro/small company status
Turnover Recognition	Not disclosed	No turnover figure provided; limits full operating cash flow insight

Interpretation:
The "vital signs" resemble a patient with steady, healthy vitals: positive net current assets and increasing equity indicate no immediate financial distress. Cash levels, while positive, are small relative to current assets, suggesting reliance on inventory or receivables for liquidity. The consistent increase in net assets reflects profitable operations or capital injections, confirming operational stability. The low current liabilities relative to current assets show the company is not over-leveraged in the short term.

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3. Diagnosis: Financial Condition Assessment

Symptoms Analysis:

• Healthy Cash Flow Signs: Positive net current assets and a growing cash balance indicate the company manages its short-term obligations effectively and has liquidity buffers.
• Inventory Build-up: Stocks increased from £4,935 in 2023 to £6,790 in 2024. This could be a sign of business growth (stocking up for sales) or potential overstocking risk if sales do not materialize.
• Equity Growth: Shareholders’ funds rose from £5,128 in 2023 to £7,344 in 2024, showing retained profits or capital injection, which is encouraging.
• No Debt Distress: No long-term liabilities reported, and current liabilities are limited to taxes and social security, suggesting minimal borrowing and conservative financial management.
• Small Scale Operations: With only 4 employees and a small share capital base, the company resembles a stable micro/small entity, still growing but with limited scale.

Overall Diagnosis:
The company is in a good state of financial health with no apparent symptoms of distress such as negative working capital, excessive liabilities, or eroding equity. The financial condition is stable, with positive momentum in asset and equity growth. The key risk lies in ensuring inventory is converted efficiently into sales and maintaining healthy cash flow as the business grows.

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4. Recommendations: Actions to Enhance Financial Wellness

• Improve Cash Reserves: While cash is positive, increasing cash reserves or improving cash conversion cycles will strengthen liquidity and provide a buffer against unexpected expenses. Consider negotiating better payment terms with customers or suppliers.
• Inventory Management: Monitor stock levels closely to avoid overstocking, which can tie up working capital. Implement inventory turnover analysis to ensure stock aligns with sales demand.
• Revenue Transparency: Incorporate clear turnover reporting in accounts to provide fuller insight into operational performance and cash generation.
• Explore Growth Financing: As the company grows, consider strategic financing options (e.g., equity investment or working capital loans) to support expansion without risking liquidity.
• Regular Financial Reviews: Conduct periodic financial health checks to track key metrics and detect early signs of stress, especially as the company scales.
• Tax and Compliance Vigilance: Continue timely payments of taxation and social security obligations to avoid penalties and maintain creditor confidence.

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Medical Analogy Summary

PLASWAY PANELS LIMITED exhibits healthy financial vitals akin to a patient with stable blood pressure and heart rate: the business is solvent, growing equity reserves, and has ample short-term assets to cover liabilities. The symptoms of distress such as poor liquidity or excessive debt are absent. The company is in a stable condition, but to move into a top-tier health grade, it should boost cash reserves and optimize inventory to maintain smooth operational flow.

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