Company Number: 15436432

Analysis Date: 2025-07-20 16:00 UTC

Financial Health Assessment for WOMERSLEY & PEACOCK LTD

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1. Financial Health Score: B

Explanation:
The company, being newly incorporated in January 2024, shows a sound initial financial position with positive net assets and working capital. The balance sheet reveals a stable foundation, but the small scale of operations and modest asset base suggest that the company is in an early growth stage. The score B reflects good initial health with room for improvement in cash flow management and building operational scale.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets	1,865	Small asset base; indicative of a light equipment or plant investment suitable for joinery.
Current Assets (Cash)	19,241	Healthy cash balance providing liquidity cushion.
Current Liabilities	17,792	Current liabilities are close to current assets, indicating careful management of short-term debts.
Net Current Assets	1,449	Positive working capital ("healthy cash flow" symptom), but narrow margin suggests vigilance needed.
Total Assets Less Current Liabilities	3,314	Shows overall positive asset base after covering short-term obligations.
Net Assets / Shareholders Funds	3,314	Positive equity base, reflecting retained earnings or initial capital injection.
Share Capital	2	Minimal paid-up capital, typical for a small private limited company.
Employees	2	Small workforce, reflecting micro or small enterprise size.

Additional Notes:

• The company operates under SIC code 43320 (Joinery installation), consistent with directors' occupation as joiners.
• No audit required due to small company exemption, which is normal for the size.
• Directors have good control and equal shareholding implying stable governance.

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3. Diagnosis: Financial Condition Analysis

Strengths ("Healthy Signs"):

• Positive net assets and net current assets indicate the company is solvent with sufficient resources to cover immediate obligations.
• Cash balance exceeding trade and other creditors suggests good liquidity management, akin to a patient with a strong pulse and stable vital signs.
• Low fixed asset base reduces financial risk from asset depreciation or impairment.
• Directors' involvement as active tradesmen suggests operational control and hands-on management.

Symptoms of Potential Stress:

• Current liabilities are relatively high compared to net current assets, leading to a narrow working capital margin. This can be a "symptom of strain" especially if cash inflows slow or unexpected expenses arise.
• Minimal share capital and early stage profitability mean the company may be vulnerable to external shocks or delays in contract payments.
• Taxation and social security liabilities form a significant portion of creditors, necessitating careful cash flow planning to avoid late payments or penalties.

Overall Diagnosis:
Womersley & Peacock Ltd is in a stable early stage with a "healthy pulse" in cash and solvency but needs to monitor its working capital closely. It is currently financially sound but still vulnerable to operational risks typical of new, small enterprises in the construction trade.

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4. Recommendations: Improving Financial Wellness

1. Cash Flow Monitoring:
   Maintain rigorous oversight on cash inflows and outflows. Consider cash flow forecasting tools to anticipate periods of tight liquidity, especially given the narrow net current asset margin.

2. Working Capital Management:
   Negotiate favourable payment terms with suppliers and clients to widen the working capital buffer. Avoid over-reliance on credit lines or delayed payments to HMRC.

3. Build Capital Reserves:
   Explore opportunities to increase retained earnings through profitable contracts or, if feasible, consider injecting additional share capital to strengthen the equity base.

4. Cost Control & Efficiency:
   Keep overheads low and manage operating expenses tightly, particularly personnel and administrative costs, to ensure profitability scales with revenue.

5. Regular Financial Reviews:
   Schedule quarterly reviews of financial statements to detect early signs of distress and adjust business plans accordingly.

6. Professional Advice:
   Engage with accountants or financial advisors for tax planning and to explore potential grants or financial support available for small businesses in the construction sector.

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