RLM SCAFFOLDING LIMITED

Executive Summary

RLM Scaffolding Limited shows a positive financial trajectory with increasing net assets and improving liquidity, though short-term liabilities currently exceed short-term assets. The company is financially stable but would benefit from enhancing cash flow management to strengthen working capital. Continued prudent financial oversight and strategic cash reserve building will support sustained business health.

RLM SCAFFOLDING LIMITED - Analysis Report

Company Number: 13530670

Analysis Date: 2025-07-29 20:58 UTC

Financial Health Assessment: RLM SCAFFOLDING LIMITED

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1. Financial Health Score: B

Explanation:
RLM Scaffolding Limited demonstrates a generally healthy financial position for a micro-entity in the construction installation sector. The company shows a positive trend in net assets and shareholders’ funds, indicating growth and capitalization improvements. However, there are mild liquidity concerns reflected in negative net current assets, which suggests some short-term cash flow pressure. Overall, the company is financially sound but should monitor working capital closely to maintain stability.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	16,351	20,438	Slight decrease, could indicate asset disposals or depreciation; not alarming for a micro company.
Current Assets	20,162	7,655	Significant increase, reflecting improved liquid resources or receivables.
Current Liabilities	27,600	23,059	Increase in short-term debts; needs careful monitoring to avoid liquidity stress.
Net Current Assets (Working Capital)	-7,438	-15,404	Negative but improving—less deficit than last year, indicating better short-term financial health.
Total Assets Less Current Liabilities	8,913	5,034	Positive and growing, showing asset base exceeds short-term obligations.
Net Assets / Shareholders Funds	8,913	5,034	Increasing equity position, indicating retained earnings or capital injection.
Average Employees	1	1	Micro entity with minimal staffing, consistent with small-scale operations.

Interpretation of Vital Signs:
The "vital signs" show a company with a growing asset base and improving net worth. The increase in current assets is a positive symptom, suggesting better cash or receivables management. However, the growth in current liabilities outpaces current assets, producing a negative working capital scenario. This is a mild symptom of liquidity strain but the improvement from 2023 to 2024 is encouraging.

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3. Diagnosis

RLM Scaffolding Limited is financially stable with clear signs of growth in net assets and an improving liquidity position. The company’s net current asset deficit indicates that short-term liabilities exceed short-term assets, which is akin to a symptom of financial "breathlessness"—the company may face challenges if creditors demand payment quickly or if cash inflows slow down. However, the reduced deficit compared to the previous year suggests effective management of this condition.

The stable employee count and position as a micro-entity imply a tightly controlled cost structure, common in early-stage or small businesses. The director's 75-100% ownership indicates centralized control, which can facilitate quick decision-making but also concentrates risk.

There are no signs of overdue filings or legal distress, which are good indicators of regulatory health and governance.

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4. Recommendations

• Improve Working Capital Management:
  Consider negotiating longer payment terms with suppliers or accelerating customer payments to boost current assets relative to current liabilities and achieve positive working capital. Healthy cash flow is critical to avoid liquidity crises.

• Monitor and Optimize Fixed Assets:
  The decrease in fixed assets should be reviewed to ensure assets are not being sold off to cover operational costs, which might mask underlying cash flow issues.

• Build Cash Reserves:
  Aim to increase cash holdings to create a buffer against sudden financial demands, reducing symptoms of financial stress.

• Maintain Regulatory Compliance:
  Continue timely filing of accounts and confirmation statements to avoid penalties and preserve company reputation.

• Explore Growth Opportunities Cautiously:
  With a positive net asset trend, consider measured investments in business development or equipment that can increase operational capacity without overextending finances.

• Regular Financial Reviews:
  Conduct periodic financial health checks to detect early warning signs of distress and adjust strategies accordingly.

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