VORTEX BUILD LTD

Executive Summary

VORTEX BUILD LTD is a recently established construction development company showing early signs of viability but operating with very tight liquidity and minimal equity buffer. The financial condition is stable yet vulnerable, with cash flow management and debtor collection identified as critical areas for improvement. Strengthening working capital and building cash reserves are essential to ensure ongoing financial wellness and support growth ambitions.

VORTEX BUILD LTD - Analysis Report

Company Number: 14646742

Analysis Date: 2025-07-29 14:13 UTC

Financial Health Assessment for VORTEX BUILD LTD (as of 31 May 2024)

---

1. Financial Health Score: C

Explanation:
VORTEX BUILD LTD shows a fragile but stable financial condition typical of a young, start-up construction development company in its first full operating period. The company has barely positive net current assets and very low net assets, indicating a delicate liquidity position. It is not yet generating strong retained earnings or equity buffer. The "C" grade reflects a company with early-stage viability but clear symptoms of tight cash flow and limited financial reserves, requiring close monitoring and proactive management.

---

2. Key Vital Signs

• Net Current Assets (Working Capital): £685
  This is the difference between current assets (£294,374) and current liabilities (£293,689). A positive working capital is a healthy sign, but this amount is extremely narrow for operational needs, indicating tight liquidity and risk of cash flow stress.

• Cash Balance: £8,297
  Cash on hand is low relative to current liabilities, suggesting limited immediate liquidity — a symptom akin to a "weak pulse" in cash flow terms.

• Debtors (Receivables): £286,077
  A large proportion of current assets are tied up in debtors (money owed by customers). This creates vulnerability if collections slow down, akin to "congested arteries" restricting cash flow.

• Current Liabilities: £293,689
  Substantial short-term obligations relative to cash and near-term assets. The company must carefully manage payables to avoid liquidity "crises".

• Net Assets (Equity): £1,106
  Very low shareholder equity reflecting minimal retained earnings and little financial "muscle". Indicates early-stage company with limited cushion against losses or unexpected expenses.

• Retention of Earnings: £1,006
  Modest retained earnings accumulated, indicating some operational progress but on a very small scale.

• Fixed Assets: £540
  Minimal investment in tangible assets, which is typical for a start-up or service-focused construction developer.

• Provisions for Liabilities (Deferred Tax): £119
  Small deferred tax liability, not currently a material concern.

---

3. Diagnosis

VORTEX BUILD LTD is in the nascent phase of its business lifecycle, showing early signs of survival but also symptoms of financial fragility. The company's working capital is just positive but extremely tight, and cash reserves are minimal. The bulk of current assets are debtors, which puts the company at risk if clients delay payments. The balance sheet reveals no significant asset base or equity buffer, which limits the company’s ability to absorb shocks or invest for growth without additional funding.

The financial statements are unaudited, which is typical for a company of this size but means the data should be treated with cautious optimism. The lack of an audit does not imply financial problems but highlights the need for rigorous internal financial controls.

Overall, this company shows "stable but vulnerable" health: it has not yet hit any critical distress but is operating on a very narrow margin and must manage cash flow and debtor collections meticulously.

---

4. Recommendations

• Strengthen Cash Flow Management:
  Prioritize accelerating debtor collections and negotiate longer payment terms with suppliers to widen the working capital buffer. Consider implementing tighter credit control policies to avoid cash flow "blockages."

• Build Cash Reserves:
  Aim to increase cash holdings to at least cover 3 months of operating expenses. This acts as a "financial first aid kit" for emergencies.

• Monitor Debtor Quality and Aging:
  Regularly review the age profile of receivables to identify slow-paying customers early and reduce bad debt risk.

• Explore Additional Capital Injection:
  Given the low equity base, consider raising additional equity or short-term financing to provide a stronger capital foundation and support growth or unforeseen expenses.

• Implement Detailed Budgeting and Forecasting:
  Use rolling cash flow forecasts to anticipate liquidity issues ahead of time, allowing for timely interventions.

• Maintain Robust Financial Controls:
  Even though audit exemption applies, ensure internal controls and accounting practices are strong to avoid "hidden ailments" in financial reporting.

• Plan for Growth and Asset Investment:
  As the company matures, strategically invest in fixed assets or technology to improve operational efficiency and competitive positioning.

---