SEEDAT RENOVATION LIMITED

Executive Summary

SEEDAT RENOVATION LIMITED demonstrates early-stage financial growth with positive net assets but struggles with negative working capital, indicating liquidity challenges. Focused efforts on improving short-term cash flow and managing current liabilities will be essential to strengthen the company’s financial health and support sustainable growth.

SEEDAT RENOVATION LIMITED - Analysis Report

Company Number: 14125997

Analysis Date: 2025-07-20 16:06 UTC

Financial Health Assessment: SEEDAT RENOVATION LIMITED

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1. Financial Health Score: C

Explanation:
SEEDAT RENOVATION LIMITED shows a modest but positive financial position as a micro-entity in its early years of operation. The company has net assets and shareholders’ funds that have increased from £100 to £4,479 over two years, indicating some growth in capital investment or asset acquisition. However, the presence of net current liabilities (negative net working capital) of £4,196 in the latest year signals potential liquidity pressure. This mixed picture suggests average financial health with caution warranted on short-term cash flow management.

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2. Key Vital Signs:

Metric	2024 Value	Interpretation
Fixed Assets	£8,675	Acquisition of fixed assets reflects investment in long-term resources; positive sign of business building capacity.
Current Assets	£284	Very low current assets, mainly cash or receivables; insufficient to cover short-term obligations.
Current Liabilities	£4,480	Current liabilities exceed current assets by a large margin; indicates short-term obligations that may strain liquidity.
Net Current Assets	-£4,196	Negative working capital ("symptom of distress")—company may face challenges meeting immediate bills.
Net Assets (Shareholders Funds)	£4,479	Positive equity base suggests the company is solvent and has a buffer of assets over liabilities.
Employee Count	0	No employees; potentially a sole trader or director-run entity, which affects operational scale and overhead structure.

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3. Diagnosis:

• Liquidity Concerns: The company exhibits a "symptom of distress" in the form of negative net current assets. Current liabilities significantly exceed current assets, pointing to potential cash flow difficulties in meeting short-term debts and obligations. This could be due to timing differences in payments or a need to better manage working capital.

• Asset Growth: The acquisition of fixed assets (£8,675) indicates capital investment, which is generally positive, suggesting the company is building a foundation for operations or growth. However, given the low current assets, these fixed assets are not easily liquidated to cover short-term needs.

• Capital Structure: The net assets and shareholders’ funds have improved from £100 to £4,479 in two years, reflecting capital injections or retained earnings, which is encouraging for a young company.

• Operational Scale: No employees are reported, which may mean the company operates on a small scale, possibly as a sole director-run business without payroll overheads. This can reduce fixed costs but also limits operational capacity.

• Business Activity: The company’s SIC code 43390 (Other building completion and finishing) aligns with the asset investment, likely in tools or equipment necessary for renovation activities.

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4. Recommendations:

• Improve Liquidity Management: Focus urgently on increasing current assets or reducing current liabilities to restore positive working capital. This could involve accelerating receivables collection, negotiating extended payment terms with suppliers, or arranging short-term financing facilities.

• Cash Flow Forecasting: Implement rigorous cash flow forecasting to anticipate short-term funding needs and avoid liquidity crises. Healthy cash flow is critical for survival and growth.

• Monitor Asset Utilization: Ensure that the fixed assets acquired are effectively generating revenue or value. Idle assets tie up capital that could otherwise improve liquidity.

• Consider Operational Scaling: Evaluate the business model and consider hiring or subcontracting to increase capacity if growth opportunities exist, while carefully balancing costs.

• Maintain Compliance and Reporting: Continue timely filing of accounts and annual returns, as current compliance status is good, supporting financial and legal transparency.

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