Company Number: 13212938

Analysis Date: 2025-07-29 15:07 UTC

Financial Health Assessment of TERRAFIRMA SITE SERVICES LIMITED

---

1. Financial Health Score: B

Explanation:
TERRAFIRMA SITE SERVICES LIMITED exhibits a solid financial footing for a micro-entity in its early years. Key indicators such as positive net assets, growing working capital, and increasing total assets suggest a generally healthy financial condition. However, the relatively small scale of operations and limited equity base imply some vulnerability to external shocks, warranting prudent management.

---

2. Key Vital Signs

Metric	2024 (£)	Interpretation
Fixed Assets	65,539	Indicates investment in long-term resources (likely machinery or equipment), supporting operations.
Current Assets	153,790	Healthy short-term asset base, including cash and receivables, crucial for operational liquidity.
Current Liabilities	57,209	Short-term obligations, manageable given current assets.
Net Current Assets (Working Capital)	96,581	Positive and growing, shows comfortable liquidity to cover short-term debts ("healthy cash flow").
Total Assets less Current Liabilities	162,120	Reflects overall asset strength after covering short-term debts.
Creditors > 1 year	12,591	Long-term debts are present but not excessive relative to assets.
Net Assets (Equity)	149,529	Solid equity base indicating the company is "in good health" with positive net worth.
Share Capital	100	Very modest capital injection, typical for a micro company.
Employee Count	2	Small team, consistent with micro classification.

---

3. Diagnosis

• Liquidity & Working Capital: The company maintains a comfortable liquidity position with net current assets of £96,581, showing a "healthy cash flow" symptom. This means the business can meet its short-term obligations without strain, a key sign of financial wellbeing.

• Solvency: Net assets have grown from £70,521 in 2021 to £149,529 in 2024, indicating retained earnings or asset appreciation, reflecting a strengthening capital structure. The low level of long-term creditors (£12,591) compared to net assets suggests solvency risk is low.

• Growth Trajectory: Both fixed and current assets have increased steadily, signaling reinvestment and operational expansion. The firm seems to be managing growth sustainably without over-leveraging.

• Company Size & Risk Profile: As a micro-entity with only two employees and low share capital, the company is inherently more vulnerable to unexpected events or market downturns. However, current metrics do not show symptoms of financial distress.

• Compliance: No overdue filings or penalties noted, reflecting good governance and operational discipline.

---

4. Recommendations

• Maintain Strong Liquidity Controls: Continue to monitor working capital closely to ensure the company retains its "healthy cash flow," especially as it grows or incurs higher fixed costs.

• Build Capital Base: Consider increasing share capital or retaining more earnings to strengthen the equity base, providing a buffer against future risks.

• Risk Management: Given the small size, implement contingency plans for cash flow disruptions and maintain conservative debt levels.

• Operational Efficiency: With a small team, ensure that operations are streamlined and scalable to support growth without proportionate cost increases.

• Regular Financial Reviews: Conduct periodic financial health "check-ups" to detect early symptoms of distress, such as declining liquidity or rising debts.

---