TAMCO SERVICES LIMITED

Executive Summary

TAMCO SERVICES LIMITED shows strong financial growth with healthy liquidity and increasing retained earnings, indicating robust operational performance. However, the significant rise in trade debtors and creditors warrants close management of cash flow and supplier relations to sustain financial health. Overall, the company is in a stable and growing position with a positive outlook if recommended controls are implemented.

TAMCO SERVICES LIMITED - Analysis Report

Company Number: 13127358

Analysis Date: 2025-07-20 11:53 UTC

Financial Health Assessment for TAMCO SERVICES LIMITED

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1. Financial Health Score: B

Explanation:
TAMCO SERVICES LIMITED shows solid financial growth and a strengthening balance sheet. The company’s net current assets and net assets have more than doubled in the latest financial year, indicating improved liquidity and capital position. However, the relatively high current liabilities compared to current assets, and the significant rise in trade creditors, suggest some caution. Overall, the company is financially stable but should monitor its working capital management closely to maintain this trajectory.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Current Assets	1,802,816	Healthy growth, showing improved ability to cover short-term obligations.
Cash at Bank	495,821	Good cash reserve, representing a healthy cash flow "heartbeat."
Trade Debtors	1,299,236	High debtor balance; indicates strong sales but potential cash collection risk ("delayed pulse").
Current Liabilities	1,110,766	Increased liabilities, primarily trade creditors, requiring careful management.
Net Current Assets (Working Capital)	692,050	Positive and growing; company can meet short-term debts, indicating a "stable pulse."
Net Assets (Equity)	692,050	Strengthened equity base; indicates retained earnings and growing shareholder value.
Share Capital	3	Minimal share capital; most equity is retained earnings, typical for small private companies.

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3. Diagnosis

• Liquidity and Working Capital:
  The company’s working capital (net current assets) has increased from £308,725 in 2022 to £692,050 in 2023, indicating a stronger liquidity position. This is a sign of financial “vitality” allowing the company to meet short-term obligations comfortably. However, the significant increase in trade creditors (from ~£233k to ~£990k) suggests the company may be extending payment terms or negotiating better credit from suppliers, which is a double-edged sword and should be monitored to avoid supplier distress.

• Receivables Management:
  Trade debtors have increased substantially, more than quadrupling from £312k to £1.3M. While this reflects increased business activity, it raises a “symptom” of potential cash flow risk if collections slow. Efficient credit control is essential to ensure these receivables convert to cash timely.

• Profitability and Retained Earnings:
  The retained profit reflected in shareholders’ funds rose from £308,722 to £692,047, demonstrating profitable operations and reinvestment into the business. The absence of a detailed profit and loss statement limits a full profitability analysis but the growth in reserves suggests operational success.

• Capital Structure:
  The company has a very small nominal share capital (£3), with all equity represented by retained earnings. This is typical of small private companies but means the company’s financial resilience depends heavily on operational performance and cash flow rather than capital injections.

• Compliance and Governance:
  The company is compliant with filing deadlines and maintains an active status with no indicators of distress such as administration or liquidation. The director and person with significant control appear stable, with no adverse records.

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4. Recommendations

1. Improve Receivables Collection:
   Implement stricter credit control measures and reduce debtor days to convert sales to cash faster, thus reducing liquidity risk.

2. Monitor Trade Creditors:
   Maintain a balance between leveraging supplier credit and preserving good supplier relationships to avoid supply chain disruption.

3. Cash Flow Forecasting:
   Develop rolling cash flow forecasts to anticipate short-term funding requirements and avoid liquidity crunches.

4. Consider Capital Injection:
   Although retained earnings are healthy, a modest capital injection could provide a buffer and improve financial flexibility if the company plans rapid growth.

5. Regular Financial Reviews:
   Conduct quarterly financial health checks focusing on working capital ratios and cash flow to detect early symptoms of distress.

6. Document Profit and Loss:
   Although currently exempt, preparing internal profit and loss statements would help management better understand operating profitability drivers.

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