CBM TRADING COMPANY LTD

Executive Summary

CBM TRADING COMPANY LTD displays significant financial distress with persistent negative net assets and working capital deficits, indicating liquidity and solvency issues. While regulatory compliance is maintained, urgent capital infusion and strategic operational improvements are essential to stabilize and improve financial health.

CBM TRADING COMPANY LTD - Analysis Report

Company Number: NI678687

Analysis Date: 2025-07-29 19:50 UTC

Financial Health Assessment for CBM TRADING COMPANY LTD (NI678687)

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1. Financial Health Score: D

Explanation:
The company shows persistent negative net assets and working capital deficits over four years, indicating financial distress. Although it remains active and compliant with filings, these symptoms suggest weak financial health requiring urgent attention.

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2. Key Vital Signs

Metric	2024 Value	Interpretation
Net Current Assets	-£1,837	Negative working capital — company’s short-term liabilities exceed its current assets, indicating liquidity issues.
Net Assets (Shareholders’ Funds)	-£1,837	Negative equity indicates the company owes more than it owns, a sign of financial distress.
Current Assets	£90	Very low current assets, implying limited cash or receivables to cover short-term debts.
Current Liabilities	£1,927	High short-term obligations that the company must meet soon.
Share Capital	£1.00	Minimal capital invested; limited financial buffer.
Average Number of Employees	0	No employees, possibly indicating a non-operational or investment holding status.

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3. Diagnosis

The company exhibits clear symptoms of financial distress, akin to a patient with low vital signs and underlying chronic conditions:

• Liquidity Crisis: Negative net current assets for multiple years reflect a "cash flow squeeze" — the company struggles to meet short-term obligations with its available current assets. This is analogous to a patient whose blood pressure is dangerously low, indicating poor circulation.

• Solvency Concerns: Persistent negative shareholders’ funds (net assets) indicate that the company’s liabilities exceed its assets. In business terms, this is a "balance sheet deficit" where the company’s financial structure is compromised, similar to a weakened immune system unable to sustain health.

• Stagnant Operations: The absence of employees and minimal share capital suggests limited business activity or investment, possibly limiting the company's ability to generate revenue or recover from losses.

• Compliance Status: On the positive side, the company is active, up to date with filings, and has not entered insolvency procedures. This suggests management is maintaining regulatory health even if financial health is poor.

Overall, CBM TRADING COMPANY LTD is in a precarious financial state, with ongoing deficits that, if unaddressed, may lead to insolvency or forced restructuring.

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4. Recommendations

To improve financial wellness and stabilize the company, consider the following actions:

• Capital Injection: Introduce new equity or shareholder loans to strengthen the balance sheet and restore positive net assets, providing a vital lifeline akin to administering fluids to a dehydrated patient.

• Cost Rationalization: Review and reduce any outstanding liabilities or operational costs to ease short-term financial pressure, similar to removing unnecessary stressors from a patient’s environment.

• Revenue Generation Strategy: Develop or revitalize business activities to increase current assets and cash inflows. Given the retail SIC codes, focus on expanding online sales or market stall presence to improve turnover.

• Financial Monitoring: Implement strict cash flow forecasting and management to detect early warning signs of distress and react proactively.

• Professional Advice: Engage with insolvency practitioners or financial advisors to explore restructuring options if losses continue, to avoid forced liquidation.

These steps are critical to reversing the downward financial trend and restoring the company to a "healthy" financial state.

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