QDL CONTRACTORS LIMITED
Company number 06294952 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Financial Health Assessment: QDL Contractors Limited
1. Financial Health Score: C+
Explanation: The patient is ambulatory but showing concerning vital signs. While the company remains solvent with a seemingly healthy balance sheet, underlying symptoms suggest financial stress is developing. The dramatic decline in cash reserves, significant related-party lending, and 20% drop in net assets within a single year are like warning signs that shouldn't be ignored. The company has a reasonable short-term liquidity position, but the trend trajectory is deteriorating.
2. Key Vital Signs
Blood Pressure – Liquidity Ratios
| Metric | 2023 | 2022 | Trend | Assessment |
|---|---|---|---|---|
| Current Ratio | 2.24x | 2.32x | ↓ Declining | Healthy range but weakening |
| Quick Ratio | 2.22x | 2.32x | ↓ Declining | Adequate liquidity excluding stock |
| Cash Position | £360,347 | £598,918 | ↓ 39.8% drop | Concerning deterioration |
Interpretation: The current ratio remains above the 2.0x threshold typically considered healthy for construction businesses, which face unpredictable cash flows. However, the direction of travel is worrying – like blood pressure that's still within normal range but steadily climbing. The 39.8% drop in cash reserves is a significant symptom that requires immediate attention.
Heart Rate – Capital Structure & Leverage
| Metric | 2023 | 2022 | Trend | Assessment |
|---|---|---|---|---|
| Total Assets | £3,032,438 | £3,361,470 | ↓ 9.8% decline | Contracting balance sheet |
| Total Liabilities | £1,736,527 | £1,741,364 | → Relatively stable | Flat |
| Net Assets | £1,295,911 | £1,620,086 | ↓ 20% decline | Significant erosion |
| Debt-to-Equity Ratio | 1.34x | 1.07x | ↑ Increasing | Leverage rising |
| Shareholders' Funds | £1,295,911 | £1,620,086 | ↓ 20% decline | Value being extracted |
Interpretation: Net assets have fallen by £324,175 – a 20% decline in just one year. This is the financial equivalent of significant weight loss; the business is shrinking. The debt-to-equity ratio has increased from 1.07 to 1.34, meaning for every £1 of shareholder equity, the company now owes £1.34 rather than £1.07. This indicates increasing financial risk.
Temperature – Cash Flow & Working Capital Health
| Metric | 2023 | 2022 | Assessment |
|---|---|---|---|
| Trade Debtors | £1,618,653 | £2,093,103 | ↓ 22.7% decline |
| Other Debtors | £564,929 | £228,752 | ↑ 147% increase |
| Related Party Loans | ~£460,774 | ~£203,016 | ↑ 127% increase |
| Trade Creditors | £688,313 | £799,567 | ↓ 13.9% decline |
| Net Current Assets | £1,423,216 | £1,662,958 | ↓ 14.4% decline |
Interpretation: This is where the most concerning symptoms appear. While trade debtors have decreased (which could indicate better collection or lower revenue), other debtors have surged by 147%. Critically, approximately 82% of other debtors (£460,774 out of £564,929) are loans to related parties – businesses controlled by the same directors. This is a major red flag.
Respiratory Rate – Long-term Financial Sustainability
| Metric | 2023 | 2022 | Assessment |
|---|---|---|---|
| Long-term |