R AND R CONSTRUCTS (UK) LTD

Executive Summary

R AND R CONSTRUCTS (UK) LTD exhibits solid financial health with positive liquidity and growing equity, reflecting stable operations typical of a well-managed micro-entity in construction. Continued focus on cash flow management and prudent scaling will support sustainable growth and resilience against market fluctuations.

R AND R CONSTRUCTS (UK) LTD - Analysis Report

Company Number: 13745366

Analysis Date: 2025-07-20 19:16 UTC

Financial Health Assessment of R AND R CONSTRUCTS (UK) LTD

---

1. Financial Health Score: B

Explanation:
R AND R CONSTRUCTS (UK) LTD demonstrates a solid financial footing for a micro-entity in the construction sector, with positive net assets and improving shareholders' funds. The company shows healthy working capital and a growing equity base, suggesting stable operations and prudent financial management. However, the relatively small scale and limited financial complexity typical of micro-entities temper the grading from an A, indicating room for growth and resilience enhancement.

---

2. Key Vital Signs

Metric	2023 Value	Interpretation
Current Assets	£9,816	Liquid assets available to meet short-term obligations
Current Liabilities	£2,507	Obligations due within one year
Net Current Assets	£7,309	Positive working capital, indicating good short-term liquidity
Net Assets	£7,109	Reflects company's total equity after liabilities
Shareholders' Funds	£7,109	Owner’s stake in the company; increasing trend from prior years
Average Employees	4	Small workforce consistent with micro-entity status

Interpretation:

• Healthy cash flow buffer: Net current assets are substantially positive, showing the company has more liquid resources than short-term debts, which is like a healthy pulse indicating the company can meet immediate financial demands without distress.
• Rising equity: An increase in net assets and shareholders’ funds from £5,198 in 2022 to £7,109 in 2023 shows the business is accumulating retained earnings or capital, a positive sign akin to increasing strength and resilience in the financial "immune system."
• Stable liabilities: Current liabilities have decreased significantly from £15,944 in 2022 to £2,507 in 2023, suggesting improved management of short-term obligations and less financial strain.

---

3. Diagnosis

• Overall Financial Condition:
  The company appears financially stable with no symptoms of distress. The positive and growing net current assets and shareholders’ funds indicate sound financial health. The reduction in short-term liabilities and steady asset base points to improving liquidity and operational management. The average number of employees increased from 1 to 4, showing business growth or scaling up capacity.

• Business Activity and Industry Context:
  Operating in plastering, site preparation, and construction of domestic and commercial buildings, the company’s financials reflect typical micro-entity characteristics with modest asset bases and controlled liabilities. The niche specialization may provide steady demand but requires careful cash flow and contract management.

• Potential Risks:
  As a micro-entity, limited asset diversification and small scale may expose it to market fluctuations and client payment delays. The company’s financial health depends significantly on effective cash flow management and maintaining contracts.

---

4. Recommendations

• Maintain Cash Flow Vigilance:
  Continue monitoring working capital closely to ensure liquidity remains healthy. Avoid overextending credit to clients or accumulating payables without corresponding receivables.

• Strengthen Financial Reserves:
  Consider building retained earnings or financial reserves to buffer against seasonal fluctuations or unexpected expenses, enhancing long-term stability.

• Scale Operations Prudently:
  With an increase in employees and business activity, ensure operational efficiencies and cost controls remain tight to prevent cash flow "fevers" from overspending.

• Regular Financial Reviews:
  Implement quarterly financial health checks to detect early warning signs of distress, similar to routine medical check-ups, allowing timely corrective actions.

• Explore Growth Opportunities:
  Investigate potential to increase contract size or diversify services within the construction sector to enhance revenue streams and reduce dependency on limited projects.

---