STORMONT ESTATE SERVICES LIMITED

Executive Summary

Stormont Estate Services Limited exhibits a fragile yet stable financial condition with positive net assets but tight working capital. The company benefits from director financial support but must improve liquidity management and profitability to strengthen its financial health. With prudent financial controls and strategic growth, the company can build resilience and improve its financial wellness.

STORMONT ESTATE SERVICES LIMITED - Analysis Report

Company Number: 13911035

Analysis Date: 2025-07-29 13:42 UTC

Financial Health Assessment: STORMONT ESTATE SERVICES LIMITED

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1. Financial Health Score: C

Explanation:
The company shows signs of being in a fragile but stable state. It maintains a positive net asset position but faces working capital constraints with net current liabilities slightly exceeding current assets. The cash position is moderate and improving year-on-year, but current liabilities are close in magnitude to cash on hand. This indicates symptoms of financial strain but not critical distress. The financial position is akin to a patient with a mild condition needing monitoring and lifestyle adjustments to avoid deterioration.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Cash & Cash Equivalents	57,832	Adequate cash reserves; increased from previous year indicating some improvement in liquidity.
Current Liabilities	58,017	Almost equal to cash, indicating tight liquidity and potential pressure on meeting short-term debts.
Net Current Assets	-185	Negative working capital ("symptom of operational strain") indicates current liabilities exceed current assets.
Net Assets (Equity)	329	Positive but very low net assets, showing the company has some buffer but limited financial cushion.
Tangible Fixed Assets	634	Low level of fixed assets, consistent with a service-oriented business model.
Director Loans	53,854	Interest-free loans from director provide financial support, acting like an external lifeline.
Profit & Loss Reserves	229	Retained earnings are positive but minimal, reflecting early-stage profitability or limited retained profits.

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3. Diagnosis: What the Financial Data Reveals About Business Health

• Liquidity Status: The company is showing symptoms of mild liquidity stress. Cash nearly offsets current liabilities, but the net current asset deficit suggests working capital is insufficient to comfortably cover short-term obligations without relying on director loans or additional financing.

• Solvency: The positive net assets confirm solvency; the company’s assets exceed total liabilities, but the margin is very slim. This is analogous to a patient with a stable but weak immune system, capable but vulnerable to shocks.

• Funding and Support: The director's interest-free loans play a critical role in maintaining operational funding. This indicates external support is vital for business survival at this stage.

• Profitability: Profit and loss reserves are positive but small. The absence of a published profit and loss account limits detailed insight, but incremental growth in reserves suggests the company is generating some profit, which is a positive sign.

• Business Model Suitability: The company operates in real estate management, a sector typically requiring low fixed asset investment but dependable cash flow. The low tangible assets and consistent cash position align with this business model.

• Company Age and Development Stage: Incorporated in 2022, the company is in its early stages, which often involves initial financial strain and the building of a financial buffer.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Improve Working Capital Management:

   • Accelerate collection of receivables and negotiate longer payment terms with suppliers to improve net current assets.
   • Closely monitor cash flow forecasts to avoid liquidity crunches.

2. Reduce Reliance on Director Loans:

   • Consider formalizing additional financing options such as a business overdraft or small business loan to diversify funding sources.
   • Develop a repayment plan for outstanding director loans to improve financial independence.

3. Increase Profitability and Reserves:

   • Focus on increasing revenue through expanding client base or service offerings.
   • Control costs rigorously to enhance profit margins and build retained earnings.

4. Financial Reporting and Transparency:

   • Publish a profit and loss account in future filings to provide stakeholders with clearer insight into operational performance.
   • Consider engaging an accountant or financial advisor for strategic financial planning.

5. Contingency Planning:

   • Establish a cash reserve buffer beyond current levels to withstand unexpected expenses or downturns.
   • Monitor tax liabilities closely given the corporation tax creditor has decreased but remains material.

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