C & L CONTRACTORS LIMITED

Executive Summary

C & L CONTRACTORS LIMITED's financial health is critically weakened due to eroding net assets and increasing liabilities, posing a risk of insolvency. Immediate actions to strengthen capital, improve cash flow, and restructure debt are essential for recovery and sustainable operation.

C & L CONTRACTORS LIMITED - Analysis Report

Company Number: 12467817

Analysis Date: 2025-07-20 19:16 UTC

Financial Health Assessment for C & L CONTRACTORS LIMITED

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1. Financial Health Score: D

Explanation:
The company shows significant signs of financial distress. While it remains active and operational, its net assets have deteriorated sharply from £1,031 in 2023 to a mere £67 in 2024, approaching a near insolvency level relative to its size. This "critical vitals" condition suggests poor financial resilience and weak equity base. The balance sheet shows a concerning decline in asset coverage against liabilities, which needs urgent attention.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	3,085	Declining asset base indicates potential underinvestment or asset disposals ("loss of muscle mass").
Current Assets	13,379	Reduced working capital resources compared to prior year; still positive but shrinking.
Current Liabilities	9,394	High short-term obligations relative to assets; manageable but tightening liquidity.
Net Current Assets	3,985	Positive working capital ("healthy cash flow buffer") but reduced by almost 50% from last year.
Creditors due after 1 year	6,386	Significant long-term liabilities ("chronic debt burden") that have increased relative to equity.
Provisions for liabilities	617	Ongoing contingent or expected costs; adds pressure on financial resources.
Net Assets (Equity)	67	Critically low shareholder equity, exposing company to insolvency risk ("near heart failure").
Share Capital	100	Minimal capital base; insufficient to absorb losses or fund growth.
Employee Count	1	Very small operation; limited human resource base.

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3. Diagnosis

C & L CONTRACTORS LIMITED is exhibiting symptoms of financial distress primarily due to rapidly eroding net assets and increasing long-term liabilities. The shrinking fixed and current assets indicate that the company may be selling off resources or failing to reinvest profits adequately. Despite maintaining a positive net current asset position, the steep decline in equity to just £67 signals a dangerously weakened financial "immune system."

This fragile equity base means the company has limited ability to absorb shocks such as delayed payments or unexpected expenses. The presence of long-term creditors and provisions further complicates the outlook, suggesting ongoing obligations that the company may struggle to meet without additional capital or improved profitability. The business is likely under pressure to maintain liquidity and may be experiencing cash flow constraints despite still being solvent on paper.

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4. Recommendations

• Strengthen Capital Base: Consider an equity injection or capital restructuring to bolster net assets and provide a buffer against liabilities. A small business with such low equity is vulnerable to insolvency.

• Improve Cash Flow Management: Tighten control over receivables and payables to improve working capital. Explore options to accelerate collections and negotiate better payment terms with suppliers.

• Review Long-Term Liabilities: Engage with creditors to restructure or refinance long-term debts to reduce the immediate burden and avoid liquidity crises.

• Asset Optimization: Assess fixed asset utilization and consider whether selling underperforming assets or investing strategically might improve returns and reduce costs.

• Cost Control and Profitability: Given the micro entity status and one-employee operation, rigorously monitor expenses and focus on profitable contracts or clients to rebuild reserves.

• Plan for Growth or Diversification: Explore new business opportunities or diversification to increase revenue streams and reduce dependency on a narrow client base.

• Regular Financial Monitoring: Implement monthly financial reviews to detect early "symptoms" of distress and take timely corrective action.

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Executive Summary

C & L CONTRACTORS LIMITED is facing a precarious financial situation marked by severely reduced equity and rising liabilities, signaling a "heart failure" in financial health. While still solvent, the company must urgently reinforce its capital structure, improve cash flow, and manage debt to avoid insolvency. With prompt corrective measures, it can stabilize and return to a healthier financial state.