STOFORD WORCESTER PLOT 10C LIMITED

Executive Summary

Stoford Worcester Plot 10C Limited is currently financially stable but exhibits early warning signs of cash flow strain typical of a young property development company. Positive working capital and equity provide a foundation, but the sharp decline in cash reserves requires active management. With focused cash flow strategies and working capital optimisation, the company can strengthen its financial health and support sustainable growth.

STOFORD WORCESTER PLOT 10C LIMITED - Analysis Report

Company Number: 14123396

Analysis Date: 2025-07-29 12:17 UTC

Comprehensive Financial Health Assessment for Stoford Worcester Plot 10C Limited

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1. Financial Health Score: C

Explanation:
The company displays a modest financial position typical of a young small business in the property development sector. While it maintains positive net current assets (a vital sign of liquidity), the shrinkage in cash reserves and a relatively small equity base suggest cautious optimism tempered by some liquidity stress. The score "C" reflects a stable but vulnerable financial condition requiring attention to cash flow management and working capital optimisation.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Current Assets	73,607	Reduced from £112k in 2023, indicating lower short-term resources.
Cash at Bank	20,343	Significant drop from £58,867 in prior year, signaling cash strain.
Debtors	53,264	Consistent, representing money owed but not yet received.
Current Liabilities	60,002	Decreased from £98,100, improving short-term debt position.
Net Current Assets (Working Capital)	13,605	Positive but small buffer to cover short-term obligations.
Shareholders Funds (Equity)	13,605	Reflects modest equity, slightly decreased from £14,031 prior year.

Interpretation of Vital Signs:

• Liquidity (Cash and Working Capital): The sharp fall in cash reserves is a symptom of cash flow pressure, potentially due to delays in collecting receivables or increased short-term expenditures. While net current assets remain positive, the narrow margin indicates fragile working capital health.

• Receivables (Debtors): Stable debtor levels suggest consistent sales or project billing, but slow collections could aggravate liquidity symptoms.

• Payables (Current Liabilities): Reduction in liabilities is a positive sign, showing some control over short-term debts, though the company still holds a significant obligation burden relative to liquid assets.

• Equity Position: A small equity base reflects the company's recent establishment and limited retained profits, indicating low capital cushion against financial shocks.

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3. Diagnosis

The financial "vital signs" resemble a patient who is stable but shows early symptoms of distress, notably in cash flow management. The company, being just under two years old, is in the growth and investment phase within the property development industry, which often requires substantial upfront expenditure before revenues are realised.

The significant reduction in cash reserves ("healthy cash flow" is compromised) suggests either increased spending on development projects or timing mismatches between cash inflows and outflows. Although the company maintains positive working capital, the small buffer signals vulnerability to unexpected expenses or delays in debtor payments.

Equity is minimal but positive, implying that the company is not insolvent but has little financial resilience.

Overall, the diagnosis is that Stoford Worcester Plot 10C Limited is financially stable at present but at risk of liquidity stress without active cash flow management and operational efficiency improvements.

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4. Recommendations

To improve the company’s financial wellness and avoid the progression of "financial symptoms" into serious distress, I recommend the following strategic actions:

1. Enhance Cash Flow Monitoring:

   • Implement rigorous cash flow forecasting to anticipate shortfalls.
   • Accelerate debtor collections through stronger credit control and early payment incentives.

2. Optimize Working Capital:

   • Negotiate extended payment terms with suppliers to ease immediate cash outflows.
   • Review project timelines and costs to align expenditures more closely with incoming revenues.

3. Build Cash Reserves:

   • Consider short-term financing options or capital injections from parent companies to buffer liquidity.
   • Prioritize projects with quicker turnaround to generate inflows sooner.

4. Regular Financial Health Check-ups:

   • Schedule quarterly financial reviews focusing on liquidity ratios, cash burn rate, and funding needs.
   • Track key indicators such as the current ratio (Current Assets / Current Liabilities), aiming to maintain it above 1.2 for comfort.

5. Leverage Group Support:

   • Since the company is part of a group, explore intra-group funding or resource sharing to improve financial stability.

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