PRECISION BUILDING SERVICES MODELLING LTD

Executive Summary

Precision Building Services Modelling Ltd is financially stable but exhibits early warning signs of distress, with declining net assets and reduced liquidity. Immediate actions to monitor cash flow and control costs are advised to prevent further deterioration. Strengthening equity and expanding business activities will be key to restoring robust financial health.

PRECISION BUILDING SERVICES MODELLING LTD - Analysis Report

Company Number: NI667956

Analysis Date: 2025-07-29 18:57 UTC

Financial Health Assessment: PRECISION BUILDING SERVICES MODELLING LTD

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1. Financial Health Score: C

Explanation:
The company shows moderate financial stability but exhibits signs of distress in recent financial years. While it maintains positive net assets and working capital, the downward trend in these metrics over the last two years suggests emerging financial strain. The micro-entity status and small scale limit financial complexity but also imply tighter margins and less room for error.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	288	Very low fixed assets, typical for a service-oriented micro business.
Current Assets	17,545	Healthy short-term resources, mainly cash or receivables.
Current Liabilities	8,298	Debts due within one year; manageable but rising compared to past years.
Net Current Assets	9,247	Positive working capital – a vital sign of liquidity and short-term health.
Total Assets Less CL	9,535	Indicates asset coverage over immediate liabilities.
Net Assets (Shareholders’ Funds)	8,563	Positive equity but a significant decline from £15,496 in 2023.
Average Number of Employees	1	Very small workforce, indicating lean operations.

Interpretation of Vital Signs:

• Liquidity ("healthy cash flow"): The company retains a positive net current asset position, indicating it can meet short-term obligations, which is a "good pulse."
• Solvency: The net assets are positive, but the halving of net assets from 2023 to 2024 signals "symptoms of distress" in financial solidity.
• Asset Base: Fixed assets are minimal, common in a design services firm, so this is not a concern.
• Trend: The sharp decline in net current assets and net assets over the last year suggests reduced financial resilience.

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3. Diagnosis

The company, as a micro private limited firm in specialised design activities, maintains a generally positive financial position but is showing warning signs. The "vital signs" reveal:

• Declining Equity and Working Capital: A significant drop in net assets and net current assets between 2023 and 2024 points to possible operational losses or increased short-term liabilities. This is akin to a patient whose blood pressure is dropping — a warning signal needing investigation.
• Stable but Minimal Asset Base: Fixed assets remain low, consistent with the business model, so no concerns here.
• Liquidity Adequate but Deteriorating: Although current assets exceed current liabilities, the margin has reduced compared to prior years, signaling "tightening liquidity."
• Single Director and Employee: The business is very lean, which limits overhead but also means dependency on a small team, increasing operational risk.

No audit was required or conducted, which is typical for micro-entities but limits external assurance of financial health.

Overall, the financial health is "stable but vulnerable." The company is currently solvent and liquid but shows symptoms that need prompt attention to prevent deterioration.

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4. Recommendations

Short-term Actions:

• Cash Flow Monitoring: Implement tighter cash flow forecasts and controls to avoid liquidity crunches. Consider negotiating extended payment terms with suppliers or clients to ease current liabilities.
• Cost Control: Review operating expenses carefully; with a single employee, focus on ensuring that costs do not outpace revenues.
• Profitability Analysis: Investigate causes of decline in net assets. If losses are occurring, identify whether they are due to reduced sales, increased costs, or one-off items.

Medium to Long-term Actions:

• Capital Injection: Explore options for fresh equity or loans to strengthen the balance sheet and provide a buffer against future shocks.
• Business Development: Focus on expanding client base or service offerings to increase revenue and rebuild reserves.
• Risk Management: Develop contingency plans for operational risks given the reliance on a single director/employee.
• Financial Reporting: Although micro-entity provisions apply, consider preparing more detailed management accounts for better internal decision-making.

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Medical Analogy Summary

The company’s financial health exhibits a "stable heart rhythm" but with "low blood pressure" due to declining net assets and working capital. These "symptoms of financial distress" could evolve into more serious conditions if not addressed with prompt "treatment," including enhanced cash management and cost controls. With careful management, the company can restore its "financial vitality."

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