C MEADOWS LTD

Executive Summary

C MEADOWS LTD is a micro private limited company operating in the specialist medical practice sector. While the company maintains a stable fixed asset base, it faces liquidity challenges evidenced by persistent negative working capital and a declining net asset position. Immediate focus on improving cash flow management and rebuilding capital reserves is essential to ensure long-term financial health and operational resilience.

C MEADOWS LTD - Analysis Report

Company Number: 12944424

Analysis Date: 2025-07-19 12:22 UTC

Financial Health Assessment Report for C MEADOWS LTD

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1. Financial Health Score: C

Explanation:
The company demonstrates some foundational financial stability with positive net assets and shareholders’ funds, but there are clear symptoms of financial strain, especially related to liquidity and working capital. The score "C" reflects a business that is operational but showing signs of financial distress that need addressing to ensure long-term health.

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2. Key Vital Signs

Metric	2023 (£)	Interpretation
Fixed Assets	26,927	Stable fixed asset base, indicating some investment in long-term operational capacity.
Current Assets	6,958	Low current assets, indicating limited short-term resources.
Current Liabilities	24,346	Significant short-term obligations; risk of liquidity crunch.
Net Current Assets (Working Capital)	(17,388)	Negative working capital implies inability to meet short-term debts with current assets.
Total Assets Less Current Liabilities	9,539	Positive but modest buffer after accounting for short-term liabilities.
Provisions for Liabilities	7,316	Growing provisions suggest anticipated expenses or contingent liabilities.
Net Assets / Shareholders’ Funds	2,223	Positive equity but declining over time, indicating erosion of retained capital.
Employee Count	1	Very small operation; potentially owner-managed or solo professional practice.

Interpretation of Vital Signs:
The company’s financial "vital signs" reveal a business with a stable asset base but a worrying "symptom" of negative working capital. This means the company may struggle to cover its short-term debts from available liquid assets, akin to a patient with adequate strength but poor hydration status—functioning but at risk. The declining net assets and increasing provisions also indicate stress on financial reserves, which may impact resilience to shocks.

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3. Diagnosis

Underlying Business Health:

• Liquidity Distress: The persistent negative net current assets over the last three years highlight an ongoing liquidity issue. The company is consistently "overstretched" in meeting its short-term obligations, which may lead to operational difficulties if not managed carefully.
• Eroding Capital Base: Net assets have decreased significantly from £28,977 in 2020 to £2,223 in 2023, suggesting accumulated losses or distributions exceeding profits. This erosion is a warning sign of weakening financial strength.
• Stable Fixed Assets: The fixed asset base remains relatively stable, indicating that the company retains its core operational capability but is not expanding asset investment.
• Small Scale and Concentrated Control: With only one employee and a single director also acting in a professional capacity (nurse), the company’s business model is very lean but potentially vulnerable to personal capacity and health risks.
• No Auditor or External Oversight: As a micro-entity, accounts are unaudited, which limits external validation of financial integrity but reduces overhead costs.

Summary Diagnosis:
C MEADOWS LTD is currently operational but shows clear symptoms of financial strain related to liquidity and capital erosion. It is akin to a patient with stable vital organ function but suffering from chronic dehydration and gradual muscle loss—still surviving but requiring intervention to avoid deterioration.

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4. Recommendations

1. Improve Working Capital Management:

   • Accelerate debtor collections and negotiate longer payment terms with creditors to improve liquidity.
   • Consider a short-term financing facility or overdraft to provide a buffer during cash flow tight periods.

2. Cost Control and Profitability Review:

   • Analyze operating expenses to identify areas for reduction or efficiency improvement without compromising service quality.
   • Explore opportunities to increase revenue streams within the current business model.

3. Capital Strengthening:

   • If possible, inject additional equity or retain earnings rather than distributions to rebuild the net asset base.
   • Consider whether fixed assets are optimally utilised or if some could be monetised for cash generation.

4. Risk Management and Contingency Planning:

   • Build a cash reserve to manage unexpected liabilities or business interruptions.
   • Regularly review provisions for liabilities to ensure they reflect realistic estimates and do not unduly erode capital.

5. Governance and Compliance:

   • Maintain timely and accurate filing and consider external financial advice to improve financial controls and forecasting.
   • Monitor personal capacity risks related to the sole director’s dual role as a healthcare professional and business operator.

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