WORRALL CONSTRUCTION LTD

Executive Summary

Worrall Construction Ltd exhibits stable and improving financial health with positive working capital and equity growth, typical of a young, profitable construction SME. Key strengths include solid cash flow fundamentals and profitability, while risks relate to credit management and limited operational scale. With prudent cash flow oversight and strategic growth planning, the company is well positioned for continued financial wellness.

WORRALL CONSTRUCTION LTD - Analysis Report

Company Number: 13971182

Analysis Date: 2025-07-29 19:36 UTC

Financial Health Assessment for WORRALL CONSTRUCTION LTD

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1. Financial Health Score: B

Explanation:
Worrall Construction Ltd demonstrates a stable and improving financial position with positive net assets and net current assets. The company shows healthy working capital management with net current assets increasing year-on-year. However, as a relatively new company (incorporated in 2022) with modest asset size and limited equity capital, it remains in an early growth phase with some exposure to financial risks typical of construction SMEs. The absence of an audit and limited financial complexity justify a cautious but positive score.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Net Current Assets	£3,625	Positive working capital indicates ability to cover short-term liabilities—a healthy cash flow "pulse."
Current Assets	£8,884	Mainly debtors, showing sales made on credit; good but needs monitoring for collection efficiency.
Current Liabilities	£5,259	Includes corporation tax, accruals, and director’s loan; manageable relative to current assets.
Net Assets (Equity)	£3,625	Positive and growing equity signals retained profits and company strength.
Share Capital	£100	Nominal capital; company relies mainly on retained earnings for strength.
Profit and Loss Reserve	£3,525	Accumulated profits indicating ongoing profitability.
Average Employees	1	Very small operational scale; low overheads but limited capacity.
Turnover Recognition	N/A (not disclosed)	Revenue recognition based on stage of completion—standard for construction; no turnover figures available to assess revenue health directly.

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3. Diagnosis: Financial Condition Overview

Worrall Construction Ltd presents with a "stable cardiovascular system" in financial terms—solid net current assets and positive net equity indicate no immediate liquidity crises or solvency issues. The company has a positive working capital "heartbeat," improving from £1,608 in 2023 to £3,625 in 2024, suggesting effective management of short-term assets and liabilities.

The reliance on debtors as the main current asset highlights a symptom of credit risk; prompt collection of these receivables is vital to maintain healthy cash flow and avoid liquidity stiffness. Corporation tax liabilities and director’s loans are current liabilities but are well covered by current assets.

The company's small size and single-employee operation limit its operational bandwidth but keep overheads low. The positive retained earnings reflect a profitable track record, supporting a growing equity base.

There is no indication of distress symptoms such as negative net assets, overdue filings, or director disqualifications. However, the company's financial "immune system" is still maturing, given its infancy and low share capital.

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4. Recommendations: Prescriptions for Financial Wellness

• Enhance Cash Flow Management:
  Ensure rigorous monitoring and collection of debtor balances to maintain liquidity and avoid cash flow "blockages." Consider setting tighter credit terms or factoring arrangements if necessary.

• Build Capital Reserves:
  Explore opportunities to increase equity capital or retain further earnings to strengthen the balance sheet buffer against future construction sector volatility.

• Monitor Tax Liabilities:
  Keep corporation tax payments timely to prevent accrual build-up which could strain short-term liquidity.

• Plan for Growth:
  As a micro-business with a single employee, consider strategic hiring or partnerships to scale operations and diversify income streams, which will improve financial robustness.

• Maintain Compliance and Transparency:
  Continue timely filing of accounts and confirmation statements to avoid regulatory "health risks" that could impair reputation.

• Consider External Audit or Review:
  Although exempt, periodic external financial reviews could provide early diagnostic insights and confidence for stakeholders.

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