C WALKER TILING & BATHROOMS LTD

Executive Summary

C WALKER TILING & BATHROOMS LTD exhibits early signs of financial strain, marked by deteriorating liquidity and rising debt despite positive net assets. Immediate focus on cash flow management and debt reduction is critical to restore financial health and ensure sustainable operations.

C WALKER TILING & BATHROOMS LTD - Analysis Report

Company Number: 13556655

Analysis Date: 2025-07-20 12:02 UTC

Financial Health Assessment of C WALKER TILING & BATHROOMS LTD

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1. Financial Health Score: C

Explanation:
The company's financial health shows signs of strain, particularly in liquidity and working capital management, indicated by a significant deterioration in net current assets and the emergence of long-term liabilities. While the company remains solvent with positive net assets, the downward trend in liquidity and equity signals caution.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	17,319	3,492	Increased investment in long-term assets - potential growth or capital expenditure.
Current Assets	619	4,501	Sharp decrease in liquid assets, indicating possible cash flow stress ("poor cash flow vitality").
Current Liabilities	4,409	1,384	Significant rise in short-term debts, worsening liquidity.
Net Current Assets (Working Capital)	-3,790	3,117	Negative working capital, a "symptom of financial distress"—liabilities exceed short-term assets.
Creditors Due After 1 Year	10,400	-	Introduction of long-term debt or obligations, increasing financial leverage ("burden of long-term liabilities").
Net Assets (Equity)	3,129	6,609	Equity has approximately halved, reflecting accumulated losses or asset revaluations.
Shareholders' Funds	3,129	6,609	Mirrors net assets; reduction indicates weakening financial buffer.
Employees	1	1	Very small scale, micro-entity status confirmed.

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3. Diagnosis

• Liquidity Crisis: The company exhibits "symptoms of liquidity distress" with current liabilities vastly exceeding current assets, causing negative working capital. This means it may struggle to meet short-term debts as they fall due.
• Rising Debt Burden: The appearance of £10,400 in long-term creditors suggests reliance on borrowings or deferred liabilities, increasing financial risk.
• Equity Erosion: Shareholders' funds have sharply declined, indicating that the company has been consuming capital or incurring losses.
• Asset Investment: The increase in fixed assets from £3,492 to £17,319 could be a positive sign of investment in capacity, but without corresponding liquidity, this could strain cash resources.
• Small Size and Limited Scale: Operating as a micro-entity with one employee limits operational scale but also reduces overhead complexity.
• No Audit Requirement: Accounts prepared under micro-entity rules with limited disclosures, meaning less transparency on profitability and cash flows.
• Single Owner Control: Full ownership and control by one director offers decision agility but also concentrates risk.

Overall, the company is showing early warning signs of financial stress, primarily driven by deteriorating liquidity, increased debt, and reduced equity base. This is comparable to a patient with a "healthy heart" (positive net assets) but "labored breathing" (cash flow constraints) needing immediate intervention.

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4. Recommendations

• Improve Liquidity: Consider strategies to boost cash reserves—accelerate receivables, negotiate extended payment terms with suppliers, or reduce inventory if any.
• Manage Debt: Review the terms and necessity of long-term creditors. Aim to refinance or reduce debt to ease interest and principal repayment pressure.
• Cost Control: Scrutinize overheads and operational costs to preserve cash.
• Monitor Working Capital Closely: Implement tighter cash flow forecasting and working capital management to prevent liquidity shortfalls.
• Explore Funding Options: If growth is intended via fixed asset investments, seek external funding (e.g., loans, grants, or equity injection) to avoid over-leveraging.
• Prepare Full P&L and Cash Flow Statements: Obtain a more detailed financial picture to identify profitability and cash flow trends.
• Engage Financial Advisors: To develop a turnaround plan if cash flow problems persist.
• Maintain Compliance: Ensure timely filing of accounts and confirmation statements to avoid penalties or reputational risks.

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