CAPELHURST LIMITED

Executive Summary

CAPELHURST LIMITED exhibits financial symptoms of liquidity strain and negative net assets, indicating a fragile balance sheet despite stable operations. Without intervention to improve working capital and bolster equity, the company risks worsening financial distress. Immediate focus on cash flow management and capital strengthening is essential to restore financial health and ensure sustainable growth in their building project development activities.

CAPELHURST LIMITED - Analysis Report

Company Number: 12776323

Analysis Date: 2025-07-29 14:42 UTC

Financial Health Assessment for CAPELHURST LIMITED

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1. Financial Health Score: D

Explanation:
The company shows persistent net current liabilities and negative net assets over the last four years, indicating ongoing financial strain. While not in immediate insolvency, the financial "vital signs" point to symptoms of liquidity stress and balance sheet weakness. The company is currently solvent but displays signs of financial distress that require careful management to avoid deterioration.

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2. Key Vital Signs

Metric	2023 (£)	2022 (£)	Interpretation
Current Assets	1,093,803	1,025,216	Healthy cash and receivables base, slightly growing
Current Liabilities	1,101,080	1,028,401	Significant short-term obligations slightly rising
Net Current Assets	(7,277)	(3,185)	Negative working capital – a symptom of liquidity strain
Net Assets	(7,277)	(3,185)	Negative equity signals persistent accumulated losses or undercapitalisation
Share Capital	300	300	Minimal capital buffer; very thin equity base
Employees	3	3	Small workforce consistent with micro entity status

Interpretation of Vital Signs:

• The negative net current assets indicate the company owes more in short-term liabilities than it holds in current assets, a classic symptom of liquidity risk.
• The negative net assets and shareholders' funds mean the company’s liabilities exceed its assets, reflecting balance sheet weakness or ongoing losses.
• The slight increase in current assets suggests some improvement or growth in operational resources, but this has not yet translated into positive working capital.
• The minimal share capital (£300) provides a very limited cushion against financial shocks.

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3. Diagnosis: Financial Condition Overview

CAPELHURST LIMITED is showing signs of financial fragility. The persistent negative working capital and net asset deficit are symptoms of underlying distress, possibly due to funding shortfalls or cumulative losses since incorporation in 2020. The company operates in the "Development of building projects" sector, which often involves significant upfront costs and timing mismatches between payments and receipts, possibly explaining liquidity pressures.

The company is not currently in liquidation or administration, which is positive, but the financials indicate a precarious position that requires attention to prevent the condition worsening into insolvency.

The "healthy cash flow" typically expected from a stable business is compromised here, as current liabilities exceed current assets. This situation is akin to a patient with borderline blood pressure—stable for now but at risk if no corrective action is taken.

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4. Recommendations: Steps to Improve Financial Wellness

• Enhance Liquidity Management:
  Review cash flow forecasting rigorously. Focus on accelerating receivables collection and negotiating extended payment terms with creditors to improve working capital.

• Strengthen Capital Base:
  Consider capital injections or loans from shareholders or external investors to shore up the equity base and provide a buffer against financial shocks.

• Cost Control and Efficiency:
  Analyze operational costs and employee productivity to ensure expenditures align with income streams. Reducing overheads may improve cash flow and profitability.

• Monitor Financial Ratios Regularly:
  Track key ratios such as current ratio and quick ratio monthly to detect early warning signs of liquidity squeeze.

• Strategic Review:
  Given the sector, evaluate project pipelines and payment terms to align cash inflows with outflows better. Possibly renegotiate contracts to improve payment schedules.

• Seek Professional Advice:
  Engage a financial advisor or turnaround specialist if liquidity issues persist, to implement restructuring strategies proactively.

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Executive Summary