ROXBURGH GROUP LIMITED

Financial Health Score: A (Excellent)

Roxburgh Group Limited exhibits the financial constitution of a highly conditioned athlete. The business boasts a robust immune system against insolvency, with virtually no leverage and a strong cash position. However, like a patient with a slightly sluggish metabolism, there are signs that capital is not being deployed as efficiently as it could be, particularly regarding funds tied up in debtor balances.

1. Key Vital Signs

• Liquidity (Blood Pressure): 7.7x (Current Ratio) With £1,000,900 in current assets against only £129,328 in current liabilities, the company's blood pressure is exceptionally strong. It has more than enough working capital to meet its short-term obligations, showing no signs of financial hypertension or distress.
• Solvency (Cholesterol Levels): 12% (Liabilities to Assets Ratio) Total liabilities represent just 12% of total assets. This is an incredibly low leverage ratio. The company is carrying virtually no "bad cholesterol" in the form of debt, meaning its financial heart is under minimal strain.
• Cash Reserves (Hydration Levels): £276,785 Cash at bank has grown healthily from £211,517 in 2024. The company is well-hydrated, ensuring it can weather any sudden financial fevers or market downturns.
• Growth (Muscle Development): +56% (Net Assets Year-on-Year) Net assets have surged from £602,787 to £940,355, an increase of over £337,000. This represents significant muscle development, driven purely by retained profits rather than artificial enhancement (debt).

2. Symptoms Analysis

While the patient is in rude health, a diagnostic scan of the balance sheet reveals a few minor anomalies that warrant monitoring:

• Circulatory Congestion (Debtors): Trade debtors have almost doubled from £76,544 to £145,616, and "Other Debtors" have swelled from £356,036 to £460,698. This suggests that while the company is generating revenue, there is a bottleneck in its circulatory system—money is leaving the heart but taking longer to return. Included within these other debtors is a £78,134 interest-free loan to the director. While not necessarily fatal, this ties up capital that could be used elsewhere.
• Intra-Group Dependencies (Shared Immune System): Amounts owed by group undertakings sit at £117,801, up from £7,000. As a subsidiary of Roxburgh Holdings Limited, the company's financial health is partially intertwined with its parent.
• Idle Energy (Excess Cash): With a current ratio of 7.7x, the company may be holding onto too much cash. While it's a great safety net, excess cash can be a symptom of anemia in business strategy—funds that could be invested in growth or returned to shareholders are sitting idle.

3. Diagnosis

Diagnosis: Robust financial health with mild circulatory friction.

Roxburgh Group Limited is financially secure and highly profitable. The £337,568 increase in the profit and loss reserve demonstrates a highly lucrative year for the consultancy. The company has no long-term debt, substantial cash reserves, and a strong equity base.

The primary concern is the efficiency of its working capital cycle. The build-up in the debtor book means the business is acting as a bank for its clients and its director. If these debts become old or unrecoverable, they could turn into toxins on the balance sheet.

4. Recommendations

To maintain peak financial wellness and optimize performance, I recommend the following treatment plan:

1. Improve Circulatory Flow (Debtor Management): Implement stricter credit control procedures to ensure trade debtors pay within 30 days. The faster the cash circulates, the healthier the business becomes.
2. Review Director's Loan (Clear Arterial Plaque): The £78,134 interest-free director loan ties up shareholder funds without providing a return. The director should consider declaring a dividend to extract profits rather than relying on loan accounts, or formally repay the loan to improve the clarity of the balance sheet.
3. Strategic Use of Excess Energy (Cash Deployment): With such high cash reserves and a current ratio well above the healthy benchmark of 1.5x-2x, the company should consider how to put this capital to work. Whether through investing in new equipment, acquisitions, or returning value to the parent company via dividends, idle cash should not be left on the table indefinitely.