C & C WASTE MANAGEMENT (UK) LTD

Executive Summary

C & C WASTE MANAGEMENT (UK) LTD is experiencing financial distress characterized by negative working capital and minimal net assets, signaling liquidity challenges and fragile solvency. Prompt measures to enhance cash flow, restructure debt, and rebuild equity are critical to restore financial wellness and sustain operations.

C & C WASTE MANAGEMENT (UK) LTD - Analysis Report

Company Number: 12907734

Analysis Date: 2025-07-29 17:14 UTC

Financial Health Assessment: C & C WASTE MANAGEMENT (UK) LTD

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1. Financial Health Score: D

Explanation:
The company exhibits clear symptoms of financial distress, primarily reflected by persistent negative working capital and very low net assets. While it remains active and filing on time, its liquidity position is weak and net equity has eroded to near zero, indicating fragile financial stability. These signs suggest the company is struggling to maintain a healthy cash flow and balance sheet strength, warranting careful attention and remedial action.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£11,425	Low level of liquid and short-term assets, decreased sharply from prior years.
Cash	£5,368	Very low cash reserves; limited buffer for daily operations.
Debtors	£6,057	Moderate receivables, but significantly reduced from £18k in prior years, possibly indicating lower sales or tighter credit management.
Current Liabilities	£36,953	High short-term debts, significantly exceeding current assets.
Net Current Assets	-£25,528	Negative working capital: a critical red flag meaning the company may struggle to cover short-term obligations.
Net Assets / Equity	£99	Almost negligible shareholders’ funds; company is effectively near insolvency from an equity perspective.
Fixed Assets (net)	£35,046	Some investment in plant and machinery, but financed substantially by liabilities.
Trade Creditors	£0	No trade creditors currently reported, which may indicate either payment delays or renegotiated terms.
Hire Purchase Debt	£11,666	Secured debt against assets, adding to leverage risk.
Provisions (Deferred Tax)	£2,738	Deferred tax liabilities reflect timing differences in tax recognition.

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3. Diagnosis

Symptoms Analysis:

• Negative Working Capital: The company's current liabilities greatly exceed current assets, indicating a cash flow crunch. This "symptom" often precedes liquidity crises where a business cannot meet short-term debts.
• Eroded Net Assets: Net equity is minimal (£99), a "vital sign" that the company has accumulated losses or capital erosion. This undermines financial resilience and ability to absorb shocks.
• Declining Cash Reserves: Cash has dropped from £17,470 in 2020 to £5,368 in 2024, showing that the company’s "circulatory system" (cash flow) is weak, potentially due to poor profitability or capital withdrawals.
• Persistent Creditors and Debt: High levels of creditors and hire purchase liabilities suggest reliance on external financing, increasing financial stress.
• Stable Employee Numbers: With only 3 employees, the company is small, which may limit economies of scale but also keeps overheads lower.
• No Audit & Small Company Regime: Lack of audit reduces transparency, and reliance on small company exemptions may mask underlying issues.

Overall Condition:
The company is in a precarious financial state, showing classic "symptoms of distress" such as negative working capital and minimal equity cushion. While it is not yet insolvent, its balance sheet is fragile, and it risks liquidity strain if cash inflows weaken or liabilities increase. The business is barely "breathing" financially and requires urgent attention to avoid a crisis.

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4. Recommendations

1. Improve Liquidity Management:

   • Accelerate collection of debtors and possibly tighten credit terms.
   • Monitor cash flow forecasts rigorously to anticipate shortfalls.
   • Consider negotiating extended payment terms with creditors to ease cash outflows.

2. Strengthen Capital Structure:

   • Explore capital injection options from shareholders or external investors to rebuild equity.
   • Assess the possibility of restructuring or refinancing hire purchase agreements to reduce short-term pressure.

3. Cost Control & Profitability Improvement:

   • Review operating expenses and overheads to identify cost-saving opportunities.
   • Enhance revenue generation through marketing or expanding services, aiming to increase turnover and cash inflows.

4. Regular Financial Monitoring:

   • Implement monthly financial health checks focusing on liquidity ratios and working capital.
   • Engage with professional advisors to develop a turnaround plan if necessary.

5. Transparency & Governance:

   • Although audit is not mandatory, consider voluntary audit or external review to enhance stakeholder confidence.
   • Maintain thorough and accurate accounting records to support decision-making.

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Executive Summary

C & C WASTE MANAGEMENT (UK) LTD shows significant signs of financial strain, particularly negative working capital and eroded equity, indicating liquidity and solvency risks. Immediate focus on improving cash flow, strengthening capital, and controlling costs is essential to stabilize the company's financial health and avoid potential insolvency. Without corrective action, the company's fragile financial position may deteriorate further.