1ST CLASS CLADDING & BUILDING LIMITED

Executive Summary

1ST CLASS CLADDING & BUILDING LIMITED is currently experiencing financial distress indicated by negative working capital and sharply reduced equity. Immediate actions focused on cash flow improvement and liability management are essential to stabilize the business and prevent further deterioration. Without prompt intervention, the company's financial health may continue to decline.

1ST CLASS CLADDING & BUILDING LIMITED - Analysis Report

Company Number: 13266520

Analysis Date: 2025-07-29 14:46 UTC

Financial Health Assessment for 1ST CLASS CLADDING & BUILDING LIMITED

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1. Financial Health Score: D

Explanation:
The company currently exhibits signs of financial distress with negative working capital and a significant drop in net assets compared to previous years. These "symptoms" suggest liquidity challenges and a weakening financial position that require urgent attention to prevent further deterioration.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£47,944	Significant decrease (~58%) from prior year (£113,660), indicating reduced liquid resources.
Cash at Bank	£43,641	Sharp drop from £112,984 (2023), signalling a tightening cash flow "pulse."
Debtors	£4,303	Increase from £676, possibly indicating slower collection or increased amounts owed.
Current Liabilities	£66,351	Remains high, though slightly reduced from £85,013 (2023). Shows short-term obligations remain a concern.
Net Current Assets (Working Capital)	-£18,407	Negative working capital ("symptom of distress") indicating inability to cover short-term liabilities with current assets.
Total Assets Less Current Liabilities	£7,458	Dramatic decrease from £66,425 in 2023, reflecting erosion of financial buffer.
Shareholders’ Funds (Equity)	£7,458	Substantial decline from £66,425, indicating a major loss of retained earnings and net worth.
Employee Count	4 (2024)	Decrease from 6 employees the previous year, possibly a cost-cutting response.

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3. Diagnosis: Financial Condition Overview

1ST CLASS CLADDING & BUILDING LIMITED is showing clear signs of "financial illness." The most telling "vital sign" is the negative working capital in 2024, which signals the company does not have enough liquid assets to meet its short-term debts. This can be likened to a patient whose vital signs indicate dehydration and weakness — immediate intervention is critical to avoid collapse.

The sharp decline in cash reserves (from £113K to £43K) reduces the company’s ability to manage day-to-day operations smoothly. The equity drop from £66K to £7.5K reflects accumulated losses or asset write-downs, weakening the company's financial "immune system."

The increase in debtors alongside declining cash suggests potential issues with credit control or collection processes, contributing to the liquidity strain. Furthermore, the reduction in employees may indicate cost-cutting measures, but also possibly a contraction in operational capacity.

The fixed assets have depreciated, which is normal, but their net book value (£25,865) is relatively small compared to liabilities, so these assets provide limited security against debts.

Overall, the "symptoms" indicate liquidity stress and deterioration of financial health despite the company remaining active and compliant with filings.

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4. Recommendations

Immediate Actions:

• Improve Cash Flow Management: Accelerate debtor collections and review credit terms to ensure faster cash inflows. Consider offering early payment discounts or stricter credit checks.
• Short-Term Liability Review: Negotiate with creditors for extended payment terms to ease liquidity pressure.
• Cost Control: Evaluate operational expenses thoroughly; reducing staff may help temporarily but assess impact on business capacity.
• Capital Injection: Consider raising additional equity or securing short-term financing to restore working capital to healthy levels.
• Financial Monitoring: Implement regular cash flow forecasting and financial KPI tracking to catch early signs of distress.

Medium to Long Term:

• Business Model Assessment: Analyze profitability drivers and market position to identify growth opportunities or necessary restructuring.
• Asset Utilization: Review fixed assets for underutilization and consider disposal of non-essential assets to improve liquidity.
• Governance and Controls: Strengthen financial governance and internal controls to avoid future financial strain.

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Medical Analogy Summary:
The company’s financial "vital signs" show a patient with dehydration (cash shortages) and weakened immune response (reduced equity). Without swift intervention to restore liquidity and manage liabilities, the risk of financial collapse increases. Implementing cash flow management and securing additional capital are critical "treatments" to revive the company’s financial health.

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