Company Number: 13788387

Analysis Date: 2025-07-20 17:08 UTC

Financial Health Assessment for C&A RENOVATIONS LTD.

---

1. Financial Health Score: D

Explanation:
The company shows critical signs of financial distress primarily due to persistent negative net assets (shareholders' funds). While the company maintains fixed assets and some working capital, its liabilities exceed its assets, signaling financial strain. This score reflects a need for immediate intervention to improve balance sheet strength and liquidity.

---

2. Key Vital Signs

Metric	2023 (£)	Interpretation
Fixed Assets	281,190	Stable asset base, likely property or equipment, representing long-term investment.
Current Assets	87,188	Cash and short-term receivables; a decline from 2022 indicates some liquidity tightening.
Current Liabilities	203,989	Short-term debts exceeding current assets, causing working capital deficit symptoms.
Net Current Assets (Working Capital)	-116,801	Negative, indicating the company may struggle to meet short-term obligations timely.
Total Assets Less Current Liabilities	164,389	Reflects net of fixed assets plus working capital; decreasing trend signals pressure.
Creditors (Long-term)	178,072	Long-term liabilities sizable relative to total net assets.
Net Assets (Equity)	-13,683	Negative equity indicates the company owes more than it owns, a symptom of financial distress.
Average Employees	2	Small workforce consistent with micro-entity status.

Interpretation:

• Negative Net Assets: The company’s liabilities exceed its total assets, which is a red flag akin to an "organ failure" in financial health. This can restrict access to credit and increase insolvency risk.
• Working Capital Deficit: Negative net current assets imply the company may face difficulty paying its short-term debts—a symptom of liquidity stress.
• Stable Fixed Assets: The asset base remains unchanged, implying no recent disposals or acquisitions, but these assets may not be easily liquidated to cover debts.
• Declining Current Assets: The drop in current assets from 2022 to 2023 suggests tightening liquidity or slower collection of receivables.
• Consistent Long-Term Debt: Still significant compared to total assets, increasing leverage and risk.

---

3. Diagnosis: Financial Condition Assessment

C&A RENOVATIONS LTD. exhibits symptoms of financial distress primarily due to negative equity and a working capital deficit. The company’s liabilities outweigh its assets, signaling insolvency risk if this condition persists. The stable fixed assets suggest no immediate asset impairment, but the inability to generate sufficient current assets to cover short-term liabilities is concerning.

The company’s micro-entity size and limited employee base imply a small operational scale, which may constrain revenue growth and capacity to absorb financial shocks. The directors’ dual control (each holding 25-50% shares) suggests concentrated ownership which can be beneficial for quick decision-making but also means limited external capital inflow.

In medical terms, the company’s "vital signs" show a heart that is beating but under strain—there is enough capital to keep operations running but insufficient reserves to withstand prolonged stress or unexpected financial shocks.

---

4. Recommendations

To improve financial wellness and avoid further deterioration, C&A RENOVATIONS LTD. should consider the following actions:

1. Address Negative Equity:

   • Inject fresh equity capital to restore positive net assets. This is akin to replenishing the company’s “blood volume” to sustain vital functions.
   • Alternatively, restructure or refinance long-term debt to reduce liabilities.

2. Improve Liquidity and Working Capital:

   • Accelerate collection of receivables and optimize inventory management to boost current assets.
   • Negotiate longer payment terms with creditors to ease short-term cash flow pressures.
   • Explore short-term financing options or overdraft facilities as a liquidity cushion.

3. Cost Control and Efficiency:

   • Review operating expenses to eliminate waste and improve margins.
   • Leverage the small team to maximize productivity and reduce overhead.

4. Strategic Review:

   • Reassess business model and revenue drivers in the real estate letting sector (SIC 68209).
   • Consider diversification or expansion opportunities to increase income streams and reduce financial vulnerability.

5. Regular Monitoring:

   • Implement monthly financial reviews focusing on cash flow forecasts and key ratios.
   • Early detection of financial “symptoms” will allow timely intervention.

---