CAP BLUE LTD

Executive Summary

CAP BLUE LTD is facing significant liquidity challenges and negative equity, indicating financial distress despite a strong asset base in investment property. Immediate actions to improve working capital, control costs, and secure additional funding are critical to stabilising the company’s financial health and ensuring its ongoing viability. With shareholder support and prudent management, the company’s outlook can improve over time.

CAP BLUE LTD - Analysis Report

Company Number: 13874088

Analysis Date: 2025-07-20 13:31 UTC

Financial Health Assessment for CAP BLUE LTD (as at 31 March 2024)

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1. Financial Health Score: D

Explanation:
CAP BLUE LTD’s financial statements reveal a company currently experiencing financial distress. The net liabilities position and substantial current liabilities overshadow its asset base, indicating the company is "unwell" financially. While it remains operational and supported by shareholders, the balance sheet and working capital metrics signal significant liquidity and solvency challenges.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Fixed Assets (Investment Property)	1,448,046	Strong asset base held in investment property.
Current Assets	50,386	Limited short-term cash and receivables.
Current Liabilities	1,509,634	Very high short-term obligations.
Net Current Assets (Working Capital)	-1,459,248	Severe working capital deficit; negative liquidity.
Net (Liabilities)/Assets	-11,202	Company has more liabilities than assets overall.
Shareholder Funds	-11,202	Negative equity indicates financial strain.
Cash at Bank and in Hand	43,309	Some cash available but insufficient vs. liabilities.
Profit and Loss Account	-11,204	Accumulated losses eroding equity base.

Additional Notes:

• The company’s investment property is carried at fair value and has shown a modest increase (£25,290 addition).
• The company is classified as a small private limited company and is exempt from audit, with accounts prepared under the small companies regime.
• Directors acknowledge the going concern assumption is supported by shareholder backing despite negative net assets.

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3. Diagnosis: What the Numbers Reveal

The financial "symptoms" indicate CAP BLUE LTD is facing liquidity distress — it has a significant mismatch between short-term assets (£50k) and short-term liabilities (£1.5M), resulting in a working capital "deficit" of approximately £1.46 million. This suggests the company may struggle to meet its immediate financial obligations without external support.

The negative net assets (-£11,202) reflect accumulated losses and imply that, on paper, liabilities exceed assets, a symptom of financial weakness or "illness." However, the presence of high-value investment property (over £1.4 million) is a positive sign, representing a potentially liquidatable asset if necessary.

The company is young (incorporated in 2022) and currently supported by shareholders who appear to have substantial control and influence, which may provide some financial lifeline — akin to a patient receiving ongoing treatment from a supportive care team.

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4. Recommendations: Steps to Improve Financial Wellness

1. Liquidity Management:

   • Prioritise improving working capital by negotiating payment terms with creditors or seeking short-term financing.
   • Accelerate collection of receivables and consider converting some investment property into cash if urgent liquidity is needed.

2. Cost Control and Profitability:

   • Review operational costs and reduce unnecessary expenses to halt the erosion of equity.
   • Explore revenue-enhancing strategies to generate positive cash flows.

3. Capital Injection:

   • Given the negative equity, consider additional shareholder funding or external equity investment to strengthen the capital base and restore financial stability.

4. Financial Monitoring:

   • Implement rigorous monthly cash flow forecasting to anticipate and manage liquidity pressures proactively.

5. Asset Utilisation:

   • Evaluate the investment property portfolio for potential sale or leveraging options to improve cash reserves.
   • Consider professional valuation updates to ensure accurate asset valuation reflecting market conditions.

6. Engagement with Advisors:

   • Consult with financial advisors or restructuring specialists early to explore restructuring or refinancing options if liquidity does not improve.

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Medical Analogy Summary:

CAP BLUE LTD is currently showing "symptoms of financial distress," particularly poor liquidity and negative equity, akin to a patient with a weakened heart function but supported by medication (shareholder support). Without intervention to improve cash flow and reduce liabilities, the company's prognosis risks worsening. However, the substantial investment property holdings act as a vital organ that, if managed well, could restore financial health.

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