PLUMB SQUAD (SCOTLAND) LTD

Executive Summary

PLUMB SQUAD (SCOTLAND) LTD is financially solvent with positive equity and working capital, but recent reductions in cash reserves and increased long-term liabilities indicate emerging liquidity pressures. Proactive cash flow management and careful debt monitoring are recommended to maintain financial health and support sustainable growth.

PLUMB SQUAD (SCOTLAND) LTD - Analysis Report

Company Number: SC689360

Analysis Date: 2025-07-29 21:23 UTC

Financial Health Assessment of PLUMB SQUAD (SCOTLAND) LTD

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1. Financial Health Score: B

Explanation:
The company demonstrates a generally sound financial position with positive net assets and healthy working capital. However, there are signs of emerging strain, including a reduction in cash reserves and an increase in longer-term liabilities, which warrant cautious monitoring and proactive management.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	37,632	56,937	Decline signals less liquid assets available for short-term needs.
Cash at Bank	37,124	55,718	Significant drop in cash reserves—potential symptom of cash flow strain.
Debtors	508	1,219	Reduced receivables—could mean improved collections or lower sales.
Current Liabilities	16,154	27,967	Improved reduction in short-term debts—positive for liquidity.
Net Current Assets (Working Capital)	21,478	28,970	Positive but decreased working capital—monitor for any liquidity stress.
Fixed Assets (Net Book Value)	16,455	4,640	Substantial increase suggests recent investment in equipment or vehicles, indicating growth or capital expenditure.
Long-Term Liabilities	7,630	0	New hire purchase contracts introduce long-term obligations—watch for repayment impact.
Provisions for Liabilities (Deferred Tax)	3,126	882	Growing deferred tax liability—reflects timing differences in taxation; should be managed carefully.
Net Assets (Equity)	27,177	32,728	Positive equity but reduced—sign of retained earnings decline or losses.

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3. Diagnosis

The financial "vital signs" of PLUMB SQUAD (SCOTLAND) LTD suggest a company that remains financially solvent and "alive," but with some symptoms of financial stress beginning to emerge. The company has positive net assets and a solid base of working capital, which is a good sign of ongoing operational health and ability to meet short-term obligations.

However, the decrease in cash reserves (a key lifeblood for any business) and the decrease in working capital could signal tightening liquidity or increased cash outflows. The significant investment in fixed assets, likely through hire purchase agreements, introduces longer-term financial commitments that could strain cash flow if revenue does not increase accordingly.

The increase in deferred tax provisions hints at changes in profitability or tax timing differences, which, while not immediately threatening, require attention for accurate cash flow forecasting.

Overall, the company is not in critical condition but shows symptoms that, if untreated, could develop into financial distress. This calls for careful cash flow management, monitoring of debt servicing capability, and strategic planning for asset utilization to ensure ongoing financial wellness.

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4. Recommendations

• Cash Flow Management:
  Regularly monitor cash inflows and outflows to ensure sufficient liquidity. Consider preparing cash flow forecasts to anticipate periods of tight cash and plan accordingly.

• Debt and Hire Purchase Monitoring:
  Ensure that hire purchase repayments are scheduled in line with cash availability. Explore options for refinancing or negotiating better terms if repayment becomes burdensome.

• Working Capital Optimization:
  Review debtor collection policies to maintain low receivables and negotiate favorable payment terms with suppliers to optimize current liabilities.

• Asset Utilization Review:
  Assess the recent capital investments for their contribution to revenue growth and profitability. Avoid further large capital expenditures until financial stability is confirmed.

• Tax Planning:
  Engage with a tax advisor to understand deferred tax implications and explore opportunities to manage tax liabilities efficiently.

• Profitability Analysis:
  Since retained earnings have declined, investigate the profitability trends to address any operational inefficiencies or cost overruns.

• Strategic Growth Planning:
  Align expansion or investment plans with financial capacity to avoid overextending resources.

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