C SINCLAIR FISH LTD

Executive Summary

C Sinclair Fish Ltd is maintaining solvency with positive net assets and improved working capital, but declining cash reserves and equity erosion indicate early financial strain. The company’s financial health is stable yet fragile, requiring focused cash flow management and strategic debt review to sustain long-term viability. With appropriate financial discipline and operational improvements, the company can restore robust financial wellness.

C SINCLAIR FISH LTD - Analysis Report

Company Number: SC668531

Analysis Date: 2025-07-29 14:54 UTC

Financial Health Assessment of C Sinclair Fish Ltd

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1. Financial Health Score: C+

Explanation:
The company demonstrates moderate financial health with stable but slightly declining net assets, manageable liabilities, and consistent working capital. However, some warning signs — such as a reduction in cash reserves and persistent long-term liabilities — indicate the firm is experiencing mild financial strain. This results in a middling score reflecting cautious optimism but highlighting areas needing attention.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Net Assets	15,944	Positive net assets indicate solvency, but a slight decline from £17,070 in 2023 signals some erosion of equity.
Current Assets	16,092	Decreased from £29,780 in 2023, primarily driven by a drop in cash; this may restrict liquidity.
Cash	10,592	Healthy cash buffer but halved compared to last year (£24,280), reducing immediate liquidity.
Current Liabilities	4,327	Significantly reduced from £21,902 in 2023, easing short-term obligations and improving working capital.
Net Current Assets (Working Capital)	11,765	Positive and improved from 2023 (£7,878), indicating the company can cover short-term debts comfortably.
Long-term Liabilities	19,046	Slightly decreased from £20,256 in 2023; these represent debts falling due beyond one year and require monitoring.
Fixed Assets (Net Book Value)	23,225	Tangible fixed assets decreased from £29,448, possibly due to depreciation; indicates stable but aging asset base.
Average Employees	4	Small workforce consistent with micro/small company status, manageable overheads.

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3. Symptoms Analysis

• Liquidity Stress Signs: The halving of cash reserves from £24,280 to £10,592 is a symptom of increasing operational cash outflows or investment. While current liabilities have dropped sharply, which is positive, the reduced cash may pose a risk if unexpected expenses arise.
• Working Capital Strength: Improvement in net current assets from £7,878 to £11,765 is a reassuring sign that the company has strengthened its short-term financial buffer, easing cash flow pressures.
• Equity Erosion: A gradual decline in net assets from £17,070 to £15,944 suggests the company has been using retained earnings or shareholder funds to cover operational losses or increased liabilities. This is a symptom of mild financial distress but not critical yet.
• Asset Depreciation: Reduction in fixed assets net book value from £29,448 to £23,225 is expected due to depreciation, but no new asset investments are apparent, which may limit future growth capacity.
• Long-Term Debt: Persistent long-term liabilities of £19,046 indicate ongoing debt obligations. Although slightly decreased, these represent a financial burden that must be serviced regularly.

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4. Diagnosis

C Sinclair Fish Ltd is currently financially solvent with positive net assets and working capital, indicating it can meet its short-term and long-term obligations. However, there are early symptoms of financial strain from diminishing cash reserves and equity erosion. The business appears to be maintaining operations without crisis but is facing pressure on liquidity and profitability. The company’s financial "pulse" is stable but weakening, requiring proactive management to prevent deterioration.

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5. Prognosis

If current trends continue, the company may face tighter liquidity in the near term due to declining cash balances. Without improvement in profitability or cash flow, the erosion of equity could accelerate, leading to weakened financial resilience. However, the reduction in short-term liabilities and steady workforce size offer a platform to stabilize the condition. With timely strategic financial actions, the company can regain a healthier financial status, but failure to address these issues could lead to distress.

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6. Recommendations

• Improve Cash Flow Management: Monitor and optimise cash collections, delay non-essential payments, and reduce inventory holding costs to rebuild cash reserves.
• Review Debt Structure: Negotiate with creditors to manage or refinance long-term liabilities to reduce interest burden and improve cash flow flexibility.
• Enhance Profitability: Evaluate pricing, cost controls, and operational efficiency to boost net income and stop equity erosion.
• Asset Investment Strategy: Consider reinvesting in fixed assets or upgrading equipment to support future growth and competitiveness.
• Regular Financial Monitoring: Implement monthly financial reviews focusing on liquidity ratios and working capital to detect early signs of distress.
• Prepare Contingency Plans: Develop plans for potential cash shortfalls, including access to credit lines or emergency funding.

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