ANDREW CRAIG SL LTD

Executive Summary

ANDREW CRAIG SL LTD is currently experiencing significant financial distress, evidenced by a growing negative working capital and shareholders' deficit. Immediate action to improve liquidity, restructure debt, and inject capital is critical to prevent insolvency and stabilize the business. With careful management and strategic adjustments, the company can improve its financial health and outlook.

ANDREW CRAIG SL LTD - Analysis Report

Company Number: 13106770

Analysis Date: 2025-07-20 13:42 UTC

Financial Health Assessment: ANDREW CRAIG SL LTD

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1. Financial Health Score: D

Explanation:
The company exhibits significant financial distress indicated by persistent and growing negative net current assets and shareholders' funds. While the company remains active and compliant with filing deadlines, the balance sheet shows ongoing liquidity challenges and a deficit in working capital, which requires urgent remedial action.

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2. Key Vital Signs

Metric	Latest (2024-03-31)	Interpretation
Current Assets	£5,637	Very low short-term asset base
Current Liabilities	£151,687	High short-term debts due within a year
Net Current Assets	-£146,050	Negative working capital (liquidity risk)
Shareholders' Funds	-£146,050	Net deficit in equity (company owes more than owns)
Average Employees	4	Small operational scale
Account Category	Micro	Minimal reporting, but still significant liabilities

Interpretation:

• Net Current Assets are deeply negative, signaling an inability to cover current liabilities with current assets, a classic symptom of "cash flow distress."
• The shareholders’ funds being negative means the company is technically insolvent on a balance sheet basis — liabilities exceed assets.
• The persistent worsening trend from -£47,907 in 2020 to -£146,050 in 2024 indicates the company's financial condition is deteriorating, not improving.
• The company's micro entity status limits the complexity of its accounts but does not diminish the severity of the financial symptoms.

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3. Diagnosis

The financial "symptoms" point to a company under stress:

• Liquidity Crisis: Negative net current assets mean the company cannot meet its short-term obligations with readily available resources, posing a risk of default on creditors.
• Balance Sheet Insolvency: Negative equity implies accumulated losses or debts exceed the value of assets, putting long-term survival at risk without capital injection or restructuring.
• Stagnant Asset Base: Current assets are minimal and have not improved materially over recent years, suggesting limited cash reserves or receivables.
• Rising Debt Burden: Current liabilities nearly doubled from ~£60k in 2020 to over £150k in 2024, which may include trade payables or short-term borrowings, increasing financial pressure.
• Small Scale Operation: With just 4 employees and classified as micro, the company’s operational scale limits its ability to absorb shocks or invest heavily in growth.

These symptoms collectively indicate financial distress, akin to a patient showing worsening vital signs without treatment. While the company is still functioning, it is at risk of "financial failure" if corrective steps are not taken.

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4. Recommendations

To improve financial wellness and stabilize the company’s health, the following steps are advised:

1. Cash Flow Management:

   • Prioritize improving cash inflows (e.g., accelerate receivables collection, improve sales terms).
   • Negotiate extended payment terms with creditors to ease short-term liquidity pressures.

2. Debt Restructuring:

   • Explore refinancing options or negotiate with creditors for debt rescheduling or reduced payment plans to reduce current liabilities.

3. Capital Injection:

   • Consider raising additional equity capital or securing long-term funding to improve shareholders’ funds and reduce insolvency risk.

4. Cost Control:

   • Review and reduce operational expenses to conserve cash without impairing core business activities.

5. Strategic Review:

   • Assess business model viability and profitability; explore opportunities to increase revenue streams, possibly through expanding services or markets.

6. Professional Advice:

   • Engage with financial advisors or insolvency practitioners early to explore turnaround or restructuring options before distress worsens.

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Medical Analogy Summary

Think of ANDREW CRAIG SL LTD as a patient with dangerously low blood pressure (cash reserves) and rising toxin levels (debt) that threaten vital organs (business operations). Without immediate treatment—improving cash flow, reducing debt, and boosting capital—the patient's condition could deteriorate rapidly, leading to insolvency "organ failure." Timely intervention offers a chance for recovery and a return to financial health.

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