ROBUSH COMPONENTS LTD
Executive Summary
ROBUSH COMPONENTS LTD is financially stable with growing net assets and investments signaling expansion. Liquidity is adequate but warrants attentive management due to modest cash levels and rising provisions for liabilities. Proactive cash flow management and careful monitoring of liabilities will help sustain healthy financial vitality as the company grows.
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This analysis is opinion only and should not be interpreted as financial advice.
ROBUSH COMPONENTS LTD - Analysis Report
Financial Health Assessment Report for ROBUSH COMPONENTS LTD
1. Financial Health Score: B
Explanation:
ROBUSH COMPONENTS LTD demonstrates a generally sound financial condition with positive net assets, improving shareholders' funds, and adequate working capital. However, there are mild symptoms of caution such as relatively low cash reserves and increasing provisions for liabilities. The company's financial “vital signs” suggest it is financially stable but room exists for strengthening liquidity and managing liabilities more aggressively.
2. Key Vital Signs & Interpretation
Metric | 2024 (£) | 2023 (£) | Interpretation |
---|---|---|---|
Fixed Assets | 41,267 | 20,873 | Asset base has nearly doubled, indicating investment in long-term assets (healthy growth). |
Current Assets | 179,986 | 234,903 | Decreased current assets, driven by lower stock and debtors, suggesting tighter working capital. |
Cash | 24,111 | 31,347 | Cash reserves are modest; cautious liquidity position that requires monitoring. |
Debtors | 80,619 | 117,700 | Debtor reduction improves cash conversion but may indicate lower sales or tighter credit terms. |
Current Liabilities | 163,385 | 213,909 | Decreased short-term debts eases pressure on liquidity; positive sign. |
Net Current Assets (Working Capital) | 16,601 | 20,994 | Positive but slightly decreasing working capital; sufficient for day-to-day operations but needs watchfulness. |
Provisions for liabilities | 10,317 | 3,966 | Increased provisions indicate potential future expenses or risks; a symptom of emerging financial stress. |
Net Assets / Shareholders Funds | 47,551 | 37,901 | Growth in net assets reflects retained earnings and financial strength improvement. |
Employees (Average) | 4 | 3 | Slight increase in staffing suggests business expansion but also increased fixed costs. |
Additional Notes:
- Directors' loans show small outstanding amounts owed to the company by directors, indicating internal financing support.
- The company’s account filing is up to date, with no overdue filings or compliance issues.
- The company is categorized as small, operating in wholesale machinery and equipment, a sector requiring capital investment for inventory and equipment.
3. Diagnosis: Financial Condition Overview
ROBUSH COMPONENTS LTD presents the financial “pulse” of a growing small enterprise with healthy net assets and ongoing investment in fixed assets. The increase in fixed assets (nearly doubling in a year) is consistent with expansion and capacity building, which is a positive sign of vitality.
The working capital remains positive but has slightly narrowed, which could be a mild “symptom” of tighter liquidity conditions. The drop in current assets, particularly debtors and stock, may indicate improved collection practices or a reduction in sales volume — both require monitoring.
Cash reserves are modest, which is a “vital sign” to watch closely, as inadequate cash can lead to “financial distress” under pressure from creditors or unforeseen expenses. The sharp increase in provisions for liabilities signals possible upcoming costs or risks, akin to an early warning sign a doctor would note before symptoms become serious.
Overall, the company’s financial health appears stable with a "fit" balance sheet and positive shareholder equity but with some caution flags regarding liquidity and liabilities that management should proactively address.
4. Recommendations: Prescriptions for Financial Wellness
- Strengthen Cash Reserves: Improve cash flow management by accelerating debtor collections, negotiating better payment terms with suppliers, or temporarily reducing inventory levels to free up cash.
- Monitor and Manage Provisions: Investigate reasons for increased provisions. If related to contingent liabilities or risks, plan and budget for these expenses to avoid surprises.
- Maintain Working Capital: Keep a close eye on working capital trends. Consider short-term financing options to buffer any liquidity gaps during growth phases.
- Optimize Asset Utilization: Ensure fixed assets investments translate into increased operational efficiency and revenue growth to justify capital expenditures.
- Directors’ Loan Accounts: Formalize clear repayment plans or convert loans into equity if appropriate, to maintain clean balance sheets and avoid cash flow distortions.
- Regular Financial Health Checks: Schedule periodic financial reviews to detect early symptoms of distress and adjust operations or strategy accordingly.
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