RD SCAFFOLDING LTD

Executive Summary

RD SCAFFOLDING LTD shows positive financial health with improving liquidity and a stable equity base, indicating operational stability typical of a micro-entity. However, the relatively high long-term debt and modest net assets suggest a need for careful debt management and equity strengthening to ensure sustainable growth. With prudent financial management, the company can maintain its healthy cash flow and build resilience for future expansion.

RD SCAFFOLDING LTD - Analysis Report

Company Number: 14192244

Analysis Date: 2025-07-19 13:03 UTC

Financial Health Assessment Report for RD SCAFFOLDING LTD

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1. Financial Health Score: B

Explanation:
The company demonstrates a stable financial position with positive net assets and improving working capital, which are vital "vital signs" of business health. However, the presence of long-term liabilities and a relatively small net asset base signal caution and room for strengthening financial resilience.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Fixed Assets	£43,350	Slight decrease from previous year, indicating possible asset depreciation or sale.
Current Assets	£18,905	Significant increase, suggesting improved liquidity and better short-term resource availability.
Current Liabilities	£8,502	Small short-term obligations relative to current assets, indicating healthy short-term solvency.
Net Current Assets (Working Capital)	£10,403	Positive and increased working capital; "healthy cash flow" symptom, enables smoother operations.
Long-Term Liabilities	£45,000	Substantial debt due after one year; requires monitoring to avoid financial strain.
Net Assets (Equity)	£8,753	Positive but modest equity base; shareholders’ "body strength" is present but not robust.
Employees	2	Small team consistent with micro entity status, implying limited operational scale.

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3. Diagnosis

• Liquidity & Working Capital: The company’s net current assets have nearly doubled year-on-year (£5,756 to £10,403), reflecting improved short-term liquidity. This is a positive "heartbeat" indicating the company can cover immediate liabilities without stress.

• Solvency & Capital Structure: The company carries a sizeable long-term liability (£45,000) relative to its net assets (£8,753). While the business remains solvent (assets > liabilities), the leverage presents a "symptom of financial strain" that could impact future flexibility if earnings or cash flow weaken.

• Asset Management: Fixed assets have slightly decreased (£51,000 to £43,350), possibly due to depreciation or asset disposal. This calls for careful monitoring to ensure asset base remains adequate for operational needs.

• Profitability & Growth: Although profit and loss data is not disclosed, incremental growth in equity and working capital suggests retained earnings or capital injections. The business shows signs of "recovery and growth," but scale remains small.

• Governance & Control: The company is controlled by a single person with over 75% shares and voting rights, which may streamline decision-making but also concentrates risk.

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4. Recommendations

1. Monitor and Manage Debt:
   Develop a clear plan to service and reduce long-term liabilities. Consider refinancing options or increasing capital to reduce debt burden and improve financial "immune system."

2. Strengthen Equity Base:
   Explore opportunities to build shareholder funds through retained profits or additional equity injections to build a stronger financial "skeleton."

3. Maintain Healthy Working Capital:
   Continue managing receivables, payables, and inventory efficiently to sustain positive cash flow and operational "vital signs."

4. Asset Review and Investment:
   Evaluate fixed asset condition and replacement needs to avoid operational disruptions and maintain productive capacity.

5. Enhance Financial Reporting:
   Consider providing more detailed financial and profit and loss reporting to enable better stakeholder insight and strategic planning.

6. Risk Management:
   Given the concentrated ownership, implement governance safeguards and contingency plans to mitigate risks associated with key-person dependence.

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