Company Number: SC765292

Analysis Date: 2025-07-20 13:39 UTC

Financial Health Assessment for Toole Electrical Contractors Ltd
Assessment Date: 31 March 2024
Company Age: Approximately 1 year since incorporation (April 2023)
Industry: Electrical Installation and Repair of Electrical Equipment (SIC 43210, 33140)
Company Status: Active, Private Limited Company

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1. Financial Health Score: B-

Explanation:
As a newly incorporated company with its first set of accounts filed, Toole Electrical Contractors Ltd shows several positive signs such as positive net current assets and shareholders’ funds. However, the presence of long-term finance lease obligations and modest net assets relative to liabilities indicate early-stage financial stress typical of startup businesses. The score reflects a cautiously optimistic outlook with some risk factors requiring management attention.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	38,426	Adequate short-term resources to cover liabilities
Cash & Cash Equivalents	27,503	Healthy liquidity buffer ("healthy cash flow")
Debtors (Trade + VAT)	10,923	Moderate receivables, manageable collection risk
Current Liabilities	24,411	Obligations due within one year; manageable but notable
Net Current Assets (Working Capital)	14,015	Positive working capital indicates ability to meet short-term debts
Fixed Assets (Tangible)	13,261	Investment in motor vehicles and equipment, supporting operations
Long-Term Liabilities	14,681	Finance lease obligations; a "symptom of financial leverage"
Net Assets (Equity)	12,595	Positive equity base, but relatively small, expected for new company
Shareholder Funds	12,595	Reflects initial capital and retained earnings (profit/loss account)
Profit and Loss Account	12,593	Indicates small retained profits or capital injections; no profit/loss detail delivered publicly

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3. Diagnosis: Financial Health Overview

Vital Signs Analysis:
The company is in its infancy, with a clean balance sheet showing positive working capital and liquidity. The cash reserve of £27,503 is a reassuring "heartbeat" indicating the company currently can fund its day-to-day operations without immediate distress. The positive net current assets confirm the company can cover its near-term obligations comfortably.

Symptoms of Financial Leverage:
The presence of £14,681 in long-term finance lease obligations signals that Toole Electrical Contractors Ltd is relying on external financing to acquire essential fixed assets (vehicles and equipment). While not unusual for a startup investing in tools and vehicles, this represents a fixed commitment that will require consistent cash generation to service.

Company Age and Scale Considerations:
With no employees reported during the period and a small scale of operations, the company is likely in startup or initial growth phase. The absence of reported profits or losses in the public accounts limits the ability to fully assess profitability and operational efficiency.

Governance and Control:
Two directors, both shareholders with significant control, manage the company. This concentrated control can be positive for decision-making agility but needs robust governance to avoid risks associated with limited oversight.

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4. Recommendations for Financial Wellness Improvement

1. Cash Flow Management:
Continue to monitor cash flow closely. Ensure that trade debtors are collected promptly to maintain liquidity and avoid cash flow "palpitations." Consider cash flow forecasting tools to anticipate any potential liquidity crunches.

2. Leverage Reduction:
Plan for gradual reduction of finance lease obligations. Explore options to refinance or purchase assets outright if cash flow permits, reducing long-term fixed costs and interest burdens.

3. Profitability Tracking:
Implement detailed profit and loss tracking internally to gain transparency on operational performance. Early identification of unprofitable activities will allow timely corrective action.

4. Business Expansion and Staffing:
Assess the need to hire employees to support growth and operational scalability. While zero employees reflect a lean startup, growth may require investment in human capital.

5. Financial Reporting and Audit Preparation:
Though exempt from audit, consider voluntary external review or audit as the company grows to enhance stakeholder confidence and identify improvement areas.

6. Governance Enhancements:
Given concentrated shareholder control, establish clear internal controls and risk management policies to safeguard against potential governance risks.

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