STANSBIE BUILDING LTD

Executive Summary

STANSBIE BUILDING LTD is currently facing significant liquidity challenges and a major decline in net assets, placing it at risk of financial instability. Immediate focus on improving cash flow and controlling costs is crucial to stabilize the company’s financial health. Without prompt remedial actions, the company’s operational viability could be compromised.

STANSBIE BUILDING LTD - Analysis Report

Company Number: 13245578

Analysis Date: 2025-07-20 18:07 UTC

Financial Health Assessment of STANSBIE BUILDING LTD (As of 31 March 2024)

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1. Financial Health Score: D

Explanation:
The company shows significant signs of financial distress, particularly with severely negative working capital and a sharp decline in net assets over the year. While it remains solvent on paper, its liquidity position is highly strained, indicating potential cash flow difficulties. This results in a low financial health grade, reflecting urgent need for remedial action.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	88,742	104,962	Slight reduction—possible asset disposals or depreciation.
Current Assets	2,007	23,744	Dramatic drop—signals very low liquid resources at year-end.
Current Liabilities	86,828	83,729	Slight increase in short-term debts—puts pressure on liquidity.
Net Current Assets (Working Capital)	-84,821	-59,985	Deepening negative working capital—symptom of liquidity strain.
Total Assets Less Current Liabilities	3,921	44,977	Substantial decline, indicating worsening overall financial position.
Net Assets (Equity)	3,021	44,077	Significant erosion of shareholder funds—a red flag for solvency risk.

Interpretation of Vital Signs:

• Healthy cash flow is absent, as the company’s current liabilities vastly exceed its current assets, showing "symptoms of distress" in meeting short-term obligations.
• The sharp fall in net assets from £44,077 to £3,021 suggests accumulated losses or write-downs, undermining the company's financial "immune system."
• Fixed assets remain relatively stable but have decreased, potentially due to depreciation or asset sales to cover liabilities.

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3. Diagnosis

The financial data reveals that STANSBIE BUILDING LTD is experiencing a liquidity crisis and erosion of retained earnings. The company's negative working capital indicates it does not have enough short-term assets (like cash or receivables) to cover its immediate debts. This "cash flow anemia" is dangerous for operational continuity. The drastic reduction in net assets points to either operational losses or impairments.

Despite being a micro-entity with minimal filing requirements, the company’s financial health is compromised, showing symptoms akin to a patient with a weakening heart—still functioning but at high risk of failure without intervention. The limited number of employees (average 1) and the company's activity in the building finishing sector suggest a small, tightly run operation that may be vulnerable to market shocks or project delays.

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4. Recommendations

• Improve Liquidity:

  • Negotiate extended payment terms with creditors to ease short-term cash flow pressures.
  • Accelerate collection of any outstanding receivables.
  • Consider short-term financing options such as overdrafts or bridging loans to cover immediate liabilities.

• Cost Control and Efficiency:

  • Review ongoing operational expenses to identify possible reductions without impairing delivery quality.
  • Examine fixed asset usage to ensure optimal return or consider liquidation of underutilized assets for cash.

• Profitability Enhancement:

  • Reassess pricing strategies and project selection to improve margins.
  • Explore diversification or value-added services related to building completion to increase revenue streams.

• Financial Monitoring:

  • Implement monthly cash flow forecasting to anticipate and manage liquidity issues proactively.
  • Engage with an accountant or financial advisor for regular health checks and strategic planning.

• Governance and Compliance:

  • Ensure timely filing of accounts and confirmation statements to maintain regulatory compliance and avoid penalties.

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