C & G SYSTEMS HOLDINGS LIMITED

Executive Summary

C & G Systems Holdings Limited has a robust fixed asset base and steadily improving equity, indicating solid financial health. However, consistent negative net current assets reveal liquidity constraints that require focused management to ensure smooth operations. Strengthening working capital management and enhancing financial transparency will help maintain and improve the company's financial wellness.

C & G SYSTEMS HOLDINGS LIMITED - Analysis Report

Company Number: SC690540

Analysis Date: 2025-07-29 18:04 UTC

Financial Health Assessment Report: C & G SYSTEMS HOLDINGS LIMITED

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1. Financial Health Score: B

Explanation:
C & G Systems Holdings Limited shows a solid financial foundation with substantial fixed assets and positive net assets. The company maintains adequate shareholders' funds that have grown steadily over recent years, indicating retained earnings and capital strength. However, the presence of net current liabilities (working capital deficit) signals some liquidity constraints, which warrant careful monitoring. Overall, the company appears financially stable but has underlying liquidity symptoms that need attention.

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2. Key Vital Signs

Vital Sign	2024 Figure (£)	Interpretation
Fixed Assets	3,015,000	Very strong asset base; long-term resources intact
Current Liabilities	919,775	Significant short-term obligations
Net Current Assets	(919,775)	Working capital deficit; cash flow may be tight
Shareholders’ Funds	2,095,225	Healthy equity cushion; owners' stake growing
Employee Count	3	Small, tightly managed workforce
Account Category	Total Exemption Full (Micro-entity)	Small company with simplified reporting

Interpretation:

• The fixed assets are substantial and unchanged over four years, indicating stable investment in long-term resources but no recent capital expansion.
• The company’s net current assets are negative, indicating it owes more in short-term liabilities than it holds in current assets—this is a symptom of liquidity strain, akin to a patient with reduced blood flow, requiring attention to ensure ongoing operational health.
• Shareholders’ funds have increased by about 6% year-on-year, a positive sign showing retained earnings or capital injections improving the firm's net worth.
• The small number of employees aligns with its micro-entity status and suggests a lean operation.

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3. Diagnosis: Financial Condition Overview

C & G Systems Holdings Limited demonstrates a sturdy long-term financial structure, with a strong fixed asset base and steadily improving equity. This is like a patient with a robust skeleton but some circulatory issues.

Symptoms of distress:

• The persistent net current liabilities indicate a liquidity shortfall. The company may face challenges meeting short-term obligations from current assets alone, signaling a need to monitor cash flow carefully.
• No profit and loss account was filed, limiting visibility into operational profitability and cash generation. This absence is like missing vital signs in a medical check-up, making full diagnosis difficult.
• The company operates under micro-entity reporting standards, so detailed financial disclosures are limited.

Strengths:

• Positive and growing shareholders’ funds reflect retained earnings and financial resilience.
• The company is active, with no overdue filings or penalties, indicating good compliance and management governance.
• Directors hold full control, suggesting clear decision-making lines.

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4. Recommendations: Prescriptions for Financial Wellness

1. Improve Working Capital Management:

   • Prioritize converting receivables to cash faster and negotiating extended payment terms with suppliers to ease liquidity pressure.
   • Consider short-term financing options or credit facilities to bridge gaps during cash flow tightness.

2. Enhance Financial Transparency:

   • Although micro-entity reporting is allowed, providing a simplified profit and loss statement could help stakeholders better understand operational performance and cash flow dynamics.
   • Regular internal financial reviews are advised to catch early warning signs.

3. Monitor Asset Utilization:

   • Assess whether the large fixed asset base is generating sufficient returns or if assets are underutilized, to optimize capital deployment.
   • Explore opportunities for asset-light strategies if cash flow constraints persist.

4. Strategic Planning:

   • Prepare cash flow forecasts to anticipate periods of strain and plan accordingly.
   • Engage with financial advisors or accountants to explore restructuring working capital or funding for growth.

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Medical Analogy Summary

C & G Systems Holdings Limited has a strong financial "skeleton" with solid fixed assets and a growing equity "immune system," but it shows "symptoms" of liquidity stress akin to a patient with restricted blood flow. Addressing working capital issues is crucial to prevent the company from entering a state of financial "shock" and to sustain its healthy long-term structure.

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