Company Number: SC686674

Analysis Date: 2025-07-20 18:55 UTC

Financial Health Assessment for CARRICK PHARMA LTD

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1. Financial Health Score: B-

Explanation:
CARRICK PHARMA LTD shows signs of moderate financial health with positive net assets and growth in shareholder equity year-on-year. However, the company exhibits symptoms of liquidity strain, evidenced by volatile net current assets and significant current liabilities relative to current assets. While it is not in immediate distress, careful management of working capital and cash flow is advisable to avoid future difficulties.

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2. Key Vital Signs

Metric	2025 Value (£)	Interpretation
Net Assets	115,914	Positive and increasing net assets indicate growing equity and solvency.
Net Current Assets	20,411	Small positive working capital; improvement from prior year but remains tight, signalling liquidity challenges.
Current Liabilities	1,409,516	High short-term obligations relative to current assets (381,431), indicating potential cash flow pressure.
Cash at Bank	90,283	Cash reserves are modest; could be insufficient to cover short-term liabilities comfortably.
Fixed Assets (Intangible + Tangible)	1,505,019	Significant investment in long-term assets, especially intangibles, which may reflect R&D or IP assets.
Debtors	255,103	Substantial receivables; effective collection needed to maintain liquidity.
Profit & Loss Reserve	115,814	Accumulated profits are growing, reflecting retained earnings and operational profitability.

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3. Diagnosis: Financial Condition Overview

CARRICK PHARMA LTD appears to be in an overall stable financial condition with a solid asset base and shareholder equity that has increased from £75,880 in 2024 to £115,914 in 2025. The company’s investment in intangible assets suggests a focus on intellectual property or proprietary products, typical for a specialized pharmaceutical or dispensing chemist business.

Symptoms of Distress:

• The company’s current liabilities are very high (£1.41 million) compared to current assets (£381k), historically resulting in negative net current assets in previous years, though slightly positive in 2025. This indicates tight liquidity and potential difficulty in meeting short-term obligations without relying on longer-term financing or improved cash conversion cycles.

• Cash reserves (£90k) are relatively low given the scale of current liabilities, which could be a "low pulse rate" warning sign for cash flow health. The company relies heavily on receivables and stock to support working capital, which may be subject to collection and inventory risks.

• Intangible asset amortization (£81k charge) and tangible asset depreciation (£8.6k charge) reduce profit margins and cash flow, representing an ongoing cost that must be covered by operational earnings.

Positive Signs:

• Improved net current assets from negative £107k in 2024 to positive £20k in 2025 shows progress in managing liquidity.

• Increasing shareholders' funds and profit & loss reserves indicate retained earnings growth and a strengthening equity base.

• No overdue filings and active status reflect good governance and compliance health.

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4. Recommendations: Steps to Improve Financial Wellness

1. Enhance Liquidity Management:
   Focus on accelerating debtor collections and optimizing inventory turnover to bolster cash flow and reduce reliance on external financing for working capital.

2. Review Short-Term Debt Structure:
   Explore refinancing options to extend maturities of current liabilities, reducing immediate cash pressure and smoothing out cash flow demands.

3. Monitor Intangible Asset Impairment:
   Regularly assess intangible assets for impairment risk to avoid overstating asset values that could mask underlying profitability issues.

4. Build Cash Reserves:
   Aim to increase cash holdings to cover at least 3-6 months of operating expenses to ensure resilience against unexpected cash flow shocks.

5. Operational Efficiency:
   Evaluate cost structures, particularly related to employee numbers and overheads, to improve profitability margins and free up cash.

6. Strategic Planning:
   Develop a robust forecast and budgeting process incorporating cash flow projections to anticipate and manage liquidity needs proactively.

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