Company Number: 12873421

Analysis Date: 2025-07-20 13:10 UTC

Financial Health Assessment for Westfield Electrical Yorkshire Limited

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1. Financial Health Score: C

Explanation:
The company shows a mixed financial condition. While it is actively trading with a positive net asset position, there are concerning signs such as a significant increase in long-term liabilities and a reduction in net assets from the previous year. This score reflects a borderline stable condition with symptoms that require close monitoring and corrective action to avoid financial distress.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Net Assets	11,353	Positive but significantly reduced from £24,797 in 2023, indicating a loss or capital erosion.
Current Assets	28,346	Healthy short-term resource base, but declined from £33,733 in 2023.
Cash	19,931	Adequate cash reserves but decreased from £30,166, suggesting tighter liquidity.
Current Liabilities	18,434	Increased from £14,759 in 2023, indicating more short-term obligations to meet.
Net Current Assets (Working Capital)	9,912	Positive but almost halved from £18,974 in 2023, showing reduced short-term buffer.
Long-Term Liabilities	27,151	Large increase from nil in prior year, mainly hire purchase contracts, indicating new debt.
Tangible Fixed Assets	31,261	Significant investment in assets, nearly quadrupled, reflecting capital expenditure.
Retained Earnings	11,253	Decreased markedly from £24,697, signaling operating losses or dividend outflows.
Employee Count	5	Small workforce consistent with small company status.

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3. Diagnosis: Financial Health Overview

Westfield Electrical Yorkshire Ltd, a small but active electrical installation company, shows signs of financial strain beneath a surface of continued operation. The company’s net assets have almost halved over the last year, a "symptom of distress" likely due to operational losses or significant dividend payouts (£19,000 paid to director). The large increase in long-term liabilities, particularly hire purchase contracts (£27,151), suggests reliance on borrowed funds to finance recent asset acquisitions (£31,261 in fixed assets).

The "healthy cash flow" seen previously has weakened, with cash reserves falling by over a third. Current liabilities have risen, compressing working capital and reducing the company’s ability to cover short-term debts comfortably. Despite this, the company remains solvent with positive net current assets and net assets, indicating it is not yet in critical condition.

The director holds full control and the company is dependent on a small team, which can be both a strength in terms of agility and a risk if key personnel are unavailable.

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4. Recommendations: Prescription for Financial Wellness

• Cost Control & Profitability: Conduct a detailed review of operating expenses and pricing strategy to stop the erosion of retained earnings. Improving profitability is crucial to rebuild equity.
• Debt Management: Reassess the terms and necessity of hire purchase financing. Explore options to refinance high-cost debt or delay further borrowing to ease interest burden.
• Cash Flow Monitoring: Institute rigorous cash flow forecasting and management to maintain adequate liquidity and avoid short-term cash shortages.
• Dividend Policy Review: Consider suspending or reducing dividends temporarily to conserve cash and bolster reserves.
• Asset Utilization: Evaluate if recent asset purchases are generating expected returns. Dispose of underutilized assets if necessary.
• Growth & Sales Strategy: Focus on increasing sales volume or diversifying services to strengthen revenue streams and improve financial resilience.
• Stakeholder Communication: Keep transparent communication with lenders, suppliers, and shareholders regarding financial strategies and health.

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