WALCOT M F LTD

Executive Summary

Walcot M F Ltd, a newly incorporated specialist construction and manufacturing company, exhibits a modest but stable financial position with positive net assets but a slight working capital deficit. The company maintains a healthy cash balance, which currently supports liquidity despite short-term liabilities exceeding current assets. Continued focus on working capital management and cash flow monitoring is essential to ensure financial wellness as the business grows.

WALCOT M F LTD - Analysis Report

Company Number: 14616933

Analysis Date: 2025-07-29 20:19 UTC

Financial Health Assessment for WALCOT M F LTD (As of 31 January 2024)

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1. Financial Health Score: C

Explanation:
The company is in its first full financial year with a modest asset base and limited operating history. It shows a small negative working capital (net current assets) indicating a slight liquidity strain, but the net asset position is positive and supported by shareholder funds. The score reflects a nascent business with some early symptoms of financial stress but no critical distress yet.

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2. Key Vital Signs (Core Financial Metrics):

Metric	Value (£)	Interpretation
Fixed Assets	4,350	Small asset base, primarily motor vehicles, typical for a startup in construction/manufacture.
Current Assets	12,843	Includes cash of £11,292, indicating some liquidity available.
Current Liabilities	13,237	Obligations due within one year slightly exceed current assets, causing negative working capital.
Net Current Assets (Working Capital)	-394	Negative working capital ("symptom of liquidity strain") suggests short-term cash flow pressure.
Net Assets (Shareholders’ Funds)	3,956	Positive net worth, meaning the company’s assets exceed liabilities overall.
Cash on Hand	11,292	Healthy cash balance relative to current liabilities, providing a buffer to meet immediate expenses.
Employees	3	Small team consistent with small-sized operations.

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3. Diagnosis: Financial Condition Analysis

• Liquidity and Cash Flow:
  The company shows a negative working capital of £394. This "slight symptom of distress" means current liabilities exceed current assets, but the cash balance of £11,292 is healthy relative to this shortfall. This suggests the company currently manages its liquidity adequately but should monitor receivables and payables closely to avoid cash flow bottlenecks.

• Capital Structure:
  Shareholder funds of £3,956 indicate the business is funded primarily by equity with no indication of long-term debt, which is a positive sign for financial stability in early years.

• Asset Base:
  Fixed assets are modest (£4,350), mainly comprising motor vehicles used in operations. Asset depreciation is being accounted for conservatively (depreciation charge of £1,450), reflecting prudent financial management.

• Profitability:
  The absence of a delivered income statement limits assessment of profitability. The company is newly incorporated (January 2023) and preparing accounts under the small companies regime, which may explain limited reporting. However, retained earnings are positive (£3,955), indicating some profit or capital injection.

• Operating Environment:
  The business operates in specialized construction and metal structure manufacturing sectors, which may involve project-based cash flows and working capital demands.

• Governance:
  Control is tightly held by a single director and shareholder, which can allow agile decision-making but may concentrate risk.

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4. Recommendations: Actions to Improve Financial Wellness

• Improve Working Capital Management:
  Aim to increase current assets relative to current liabilities. This can be achieved by accelerating receivables collection, negotiating longer payment terms with suppliers, or managing inventory tightly.

• Cash Flow Monitoring:
  Maintain a detailed cash flow forecast to anticipate shortages and plan financing needs proactively. Ensure that "healthy cash flow" is sustained through careful expense control.

• Profitability Tracking:
  Even though no income statement is provided, the company should track revenues and costs closely to confirm it is moving towards sustainable profit margins.

• Consider Funding Strategy:
  Depending on growth plans, consider external financing options to bolster liquidity, such as short-term credit facilities or equity injections, especially if working capital strain persists.

• Governance and Controls:
  With control vested in one individual, ensure robust internal controls and financial oversight to manage risks effectively.

• Future Reporting:
  Prepare to file full accounts including profit and loss statements in subsequent years to provide a clearer picture of financial health to stakeholders.

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