TAYLOR KELHAM LTD

Executive Summary

TAYLOR KELHAM LTD shows positive revenue growth and solid profitability, reflecting good operational health. However, a notable decline in liquid assets signals the need for improved cash flow management to maintain financial stability. With targeted interventions, the company is well-positioned to sustain and strengthen its financial wellness.

TAYLOR KELHAM LTD - Analysis Report

Company Number: 13990125

Analysis Date: 2025-07-20 11:15 UTC

Financial Health Assessment Report for TAYLOR KELHAM LTD

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1. Financial Health Score: B

Explanation:
TAYLOR KELHAM LTD demonstrates a solid foundation typical of a micro-entity in its early years. The company shows healthy profitability and positive net assets with minimal liabilities, indicating good financial stability. However, the decline in current assets and net assets year-over-year suggests some liquidity tightening, which deserves attention to maintain a strong cash flow position as the business grows.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Turnover	82,443	Growing revenue, up from £73,821 in 2023—a positive sign of business expansion.
Profit for the Period	154,033	Unusually high profit compared to turnover—likely includes non-cash items or accounting adjustments; requires confirmation.
Fixed Assets	11,500	Stable investment in long-term assets, aligned with industry needs.
Current Assets	2,652	Sharp decline from £10,372 in 2023; potential liquidity concern ("weak pulse" in cash or receivables).
Current Liabilities	95	Very low short-term obligations, indicating low immediate financial stress.
Net Current Assets	2,557	Positive working capital, but notably reduced from previous year, suggesting tighter day-to-day liquidity.
Net Assets / Shareholders’ Funds	14,057	Positive equity base, though reduced from £18,214 in 2023; the "vital signs" suggest some use of reserves or distribution of capital.

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3. Diagnosis: What the Financial Data Reveals

• Profitability & Revenue Growth: The company’s turnover has increased year-over-year, indicating healthy market demand and operational success in the landscaping, building completion, and plumbing sectors. The reported profit figure is unusually high relative to turnover, likely due to non-operational income or accounting methods. Verification and clarification from management would be prudent.

• Liquidity & Working Capital: The sharp decline in current assets from £10,372 to £2,652 is a symptom of reduced liquid resources or receivables. While current liabilities remain minimal, this shrinking "cash flow pulse" could indicate tighter cash management or slower collections from clients.

• Asset Management & Capital Structure: Fixed assets remain stable, suggesting no recent major capital expenditures or disposals. The net asset base remains positive, providing a cushion against financial shocks, but the decline from the previous year signals careful monitoring of retained earnings and possible distributions.

• Business Scale & Risk Exposure: As a micro-entity with two directors and two employees, the company's operational scale is small, which limits complexity but also means financial shocks or delays in payments can have outsized effects.

• Governance & Control: Ownership and control are concentrated between two directors holding significant voting rights and shareholding, which provides strong decision-making coherence but may limit external oversight.

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4. Recommendations: Specific Actions to Improve Financial Wellness

1. Cash Flow Monitoring:

   • Conduct a detailed cash flow analysis to understand the cause behind the reduction in current assets. Ensure timely invoicing and collections to maintain a healthy liquidity buffer.

2. Profit Verification:

   • Review the profit and loss account with accounting advisors to confirm the unusually high profit figure, ensuring accurate representation of operational profitability.

3. Working Capital Management:

   • Optimize management of receivables and payables to improve net current assets and avoid liquidity crunches.

4. Financial Planning:

   • Develop a rolling forecast to anticipate seasonal fluctuations in cash and expenses, helping to smooth operational funding needs.

5. Capital Reserves:

   • Maintain adequate retained earnings to support ongoing fixed asset maintenance and potential expansion plans without over-distribution.

6. Governance Enhancements:

   • Consider periodic financial reviews by an external advisor or accountant to provide independent oversight and guidance.

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Medical Analogy Summary

TAYLOR KELHAM LTD currently exhibits a stable heartbeat with a strong pulse in revenue growth and profitability. However, the symptom of reduced current assets is akin to a weakening blood flow, signaling the need for vigilant cash flow management to avoid financial distress. With attentive care and strategic actions, the company’s financial health can remain robust and improve over time.

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