Company Number: 12856920

Analysis Date: 2025-07-29 19:49 UTC

Financial Health Assessment for TSA SURVEYING LIMITED (As of 31 December 2024)

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1. Financial Health Score: B+

Explanation:
TSA Surveying Limited exhibits strong liquidity, robust working capital, and steadily increasing shareholder equity, indicating generally good financial health. The company shows healthy growth in net current assets and shareholders' funds over recent years, with no overdue filings or signs of distress. However, cash on hand remains relatively low compared to debtors, which requires monitoring to ensure liquidity under stress. Overall, the company’s financial "vital signs" suggest it is in a stable and expanding condition but should manage cash flow carefully to maintain this trajectory.

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2. Key Vital Signs and Interpretation

Vital Sign	2024 Value	Interpretation
Current Assets	£2,570,575	Healthy pool of short-term assets, primarily debtors, indicating strong expected cash inflows.
Cash at Bank and In Hand	£18,966	Low cash on hand relative to debtors; potential liquidity risk if collections slow.
Debtors	£2,551,609	High level of receivables; signals strong sales but requires efficient collection management.
Current Liabilities	£802,480	Manageable short-term obligations; company comfortably covers these with net current assets.
Net Current Assets (Working Capital)	£1,768,095	Strong positive working capital, indicating good short-term financial health and operational liquidity.
Shareholders’ Funds (Equity)	£1,770,923	Equity has doubled since 2020, reflecting retained earnings and business growth— a sign of financial robustness.
Tangible Fixed Assets	£2,828	Minimal investment in fixed assets, appropriate for a service/recruitment business.
Employee Count	16 (average)	Growing workforce supporting business expansion.
Turnover/Revenue	Not disclosed	Not available, but debtor increases suggest rising business volume.

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3. Diagnosis: Financial Health Overview

TSA Surveying Limited presents with strong financial "vital signs" akin to a patient with a good pulse and blood pressure but with a slightly low hydration level (cash). The company’s working capital is robust, showing it has ample short-term resources to meet immediate obligations, which is a primary indicator of financial wellness. The doubling of shareholders’ equity since inception reflects retained profits and an accumulation of reserves, akin to building strength and reserves in a healthy organism.

The high debtor balance is a symptom that requires ongoing attention. While it signals strong sales or contracts, it also means the company’s cash flow is dependent on timely collection. The relatively low cash reserves could be a bottleneck if there is a delay in debtor payments or unexpected expenses arise. This "symptom" suggests the company should monitor its cash conversion cycle closely.

The company’s small fixed asset base is consistent with its industry (temporary employment agency), implying limited capital expenditure requirements and flexibility.

No signs of distress such as overdue filings, high short-term debt relative to assets, or negative equity are present, indicating a stable and growing financial condition. The recent establishment of an employee ownership trust is a positive governance and morale booster, potentially improving long-term stability and employee engagement.

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4. Recommendations: Path to Improved Financial Wellness

• Enhance Cash Reserves: Consider strategies to improve cash holdings to provide a buffer against liquidity shocks. This might involve negotiating better payment terms with customers or implementing more efficient debtor collection processes.

• Manage Debtor Days: Monitor and actively manage accounts receivable to reduce the collection period. High debtor levels tied up in working capital could hinder operational flexibility.

• Maintain Positive Working Capital: Continue to monitor the balance between current assets and liabilities to ensure ongoing operational liquidity.

• Leverage Equity Growth: With steadily increasing equity, explore investment opportunities to support growth, such as technology upgrades or expanding services, without over-leveraging.

• Employee Engagement: Maximise the benefits of the newly established Employee Ownership Trust by promoting employee involvement and aligning incentives with business performance.

• Regular Financial Review: Conduct periodic financial health checks to detect early signs of distress, especially focusing on cash flow and debtor management, to sustain healthy "vital signs."

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