RC COACHWORKS LTD

Executive Summary

RC COACHWORKWORKS LTD exhibits a solid financial foundation with strong growth in assets and cash reserves, reflecting healthy liquidity and operational investment. However, rising short-term liabilities and provisions are early warning signs requiring close management to sustain financial wellness. With prudent oversight and targeted actions, the company is well-positioned for continued financial health and growth.

RC COACHWORKS LTD - Analysis Report

Company Number: SC709701

Analysis Date: 2025-07-29 18:45 UTC

Financial Health Assessment of RC COACHWORKS LTD (as at 30 September 2024)

---

1. Financial Health Score: B

Explanation:
RC COACHWORKS LTD demonstrates solid financial footing with positive net assets and improving shareholder funds. The company shows growth in fixed assets and cash reserves, indicating investment and liquidity strength. However, rising current liabilities and provisions warrant cautious monitoring. The "B" grade reflects a generally healthy financial condition but with some early warning signs that should be managed to sustain momentum.

---

2. Key Vital Signs

Metric	2024 Value	Interpretation
Net Assets (Shareholders' Funds)	£63,440	Healthy equity base more than 70% higher than prior year, signaling growth in retained earnings and asset base.
Fixed Assets (Tangible)	£70,356	Increased by ~80% suggesting capital investment in business infrastructure or equipment, a positive growth sign.
Current Assets	£77,790	Growth primarily driven by cash (£62,844), indicating strong liquidity and capacity to meet short-term obligations.
Current Liabilities	£72,154	Substantially increased (~69%) compared to prior year; includes taxation, finance leases, and trade payables—indicates higher short-term obligations.
Net Current Assets (Working Capital)	£5,636	Positive but modest working capital; indicates ability to cover short-term debts but with limited buffer.
Provisions for Liabilities	£10,221	Significant increase from prior year (£1,014), could indicate anticipated future expenses or risks.
Cash Balance	£62,844	Robust cash position signals healthy cash flow and operational liquidity.
Debtors	£14,946	Decreased from £27,656, suggesting improved collection or lower sales on credit, reducing risk of bad debts.
Total Assets Less Current Liabilities	£75,992	Strong asset base after covering short-term liabilities, indicating good solvency.

---

3. Diagnosis: Financial Condition Analysis

RC COACHWORKS LTD is showing several "vital signs" of a business in good health:

• Healthy Cash Flow: The large cash balance relative to current liabilities indicates strong liquidity, akin to a patient with a steady heartbeat and good circulation. This means the company can comfortably meet its immediate financial obligations without stress.
• Asset Growth: The significant increase in fixed assets suggests the company is investing in its operational capacity, which is typically a sign of growth and confidence in future prospects.
• Positive Net Assets: The company’s net assets increasing substantially indicates it is building equity rather than depleting it, a sign of good financial "immune response."
• Working Capital: Although positive, the net current assets are modest. This is a symptom that while the company can cover short-term debts, there isn’t a large cushion for unexpected shocks.
• Rising Provisions: The jump in provisions is a symptom that demands attention—these could represent potential liabilities or contingent risks that might impact financial health if they materialize.
• Increased Current Liabilities: The rise in short-term creditors and finance lease obligations signals increased financial activity and possibly reliance on external financing, which should be monitored for sustainability.

Overall, the company is in a stable condition but showing early signs of financial strain from increased liabilities and provisions. These "symptoms" suggest vigilance is needed to avoid future distress.

---

4. Recommendations: Financial Wellness Actions

1. Monitor and Manage Provisions:
   Investigate the nature of the increased provisions (£10,221) to understand the underlying risks or liabilities. If possible, mitigate these risks proactively to prevent sudden financial stress.

2. Control Current Liabilities Growth:
   The sharp rise in current liabilities, particularly finance leases and taxation, suggests the company is incurring more short-term obligations. A plan to manage or refinance these liabilities to more favourable terms could improve financial stability.

3. Maintain Strong Cash Reserves:
   Continue to prioritize cash flow management to keep the liquidity strong, ensuring the company can handle any unexpected expenses or downturns without resorting to costly borrowing.

4. Enhance Working Capital Buffer:
   Aim to increase net current assets beyond the current modest £5,636 buffer to provide a safer margin against operational fluctuations or delayed receivables.

5. Regular Financial Health Check-Ups:
   Given the company’s growth and evolving financial structure, periodic financial reviews (quarterly or biannually) will help catch early warning signs and adjust strategies as needed.

---