S.BROWN JOINERY LTD

Executive Summary

S.BROWN JOINERY LTD is a newly established micro-entity demonstrating foundational strength in fixed assets but showing early liquidity strain with negative working capital. The company has a modest equity base and manageable long-term debt but must focus on improving cash flow and building reserves to ensure sustainable growth. With prudent financial management and operational discipline, the company can strengthen its financial health and avoid liquidity pitfalls.

S.BROWN JOINERY LTD - Analysis Report

Company Number: 14527559

Analysis Date: 2025-07-29 12:42 UTC

Financial Health Assessment for S.BROWN JOINERY LTD

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1. Financial Health Score: C

Explanation:
The company demonstrates basic financial stability but shows early warning signs of liquidity stress. Being a micro-entity with a small asset base and net current liabilities, the score reflects a company in the early stages of operation with moderate financial resilience but vulnerable to cash flow constraints.

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2. Key Vital Signs

Metric	Value	Interpretation
Fixed Assets	£15,805	Indicates investment in long-term joinery equipment or tools—healthy for operational capability.
Current Assets	£3,901	Includes cash and receivables—quite low, signaling limited short-term liquidity.
Current Liabilities	£5,636	Short-term debts exceed current assets, causing a working capital deficit (net current assets: -£1,713).
Net Current Assets	-£1,713	Negative working capital suggests the company may struggle to meet short-term obligations promptly.
Creditors Due After One Year	£11,500	Long-term liabilities present a future outflow burden; manageable if matched by strong cash flows.
Net Assets	£2,557	Positive but low equity; the company has a modest buffer but limited financial strength.
Shareholders' Funds	£2,557	Equity capital matches net assets; no retained earnings yet as the company is newly incorporated.

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3. Diagnosis: What the Financial Data Reveals

S.BROWN JOINERY LTD is in its infancy, having incorporated in December 2022 and reporting its first full financial year ending December 2023. The company displays the "symptoms" typical of a young micro-business in a capital-intensive trade like joinery installation:

• Healthy fixed asset base relative to company size, indicating investment in necessary tools or equipment.
• Negative working capital reveals a liquidity "symptom" of potential cash flow strain: current liabilities exceed current assets, meaning the company may face challenges in paying short-term debts without additional cash inflows.
• Low net assets and equity reflect the early stage of capitalization; the business hasn't yet accumulated profits or substantial reserves.
• Long-term borrowings (£11,500) may be loans or finance arrangements used to acquire fixed assets, indicating some leverage but requiring careful repayment management.

Overall, the company is functional but financially fragile. The current financial "vital signs" suggest it is walking a tightrope between operational capability and liquidity risk. The absence of overdue filings and the presence of a single director actively engaged points to good compliance discipline.

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4. Recommendations: Steps to Improve Financial Wellness

1. Improve Liquidity Management:

   • Aim to increase current assets by accelerating cash collection from customers and managing inventory efficiently.
   • Negotiate extended payment terms with suppliers to reduce short-term liabilities pressure.

2. Build Working Capital Cushion:

   • Consider injecting additional equity or securing short-term credit facilities to cover the negative working capital gap and provide a buffer against unforeseen expenses.

3. Monitor Long-Term Debt Servicing:

   • Develop a clear repayment plan for the £11,500 long-term creditors to avoid default risk.
   • Explore refinancing options if interest rates or repayment terms become onerous.

4. Enhance Profitability:

   • Focus on margin improvements through cost control and pricing strategies to generate retained earnings that will strengthen net assets.

5. Regular Financial Review:

   • Establish monthly cash flow forecasts and financial reviews to detect early "symptoms" of distress and respond proactively.

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