CESANA LTD

Executive Summary

CESANA LTD is currently solvent but exhibits signs of financial strain, particularly in liquidity and working capital management. The company's cash reserves have dwindled, and net assets have declined significantly, signaling a need for improved cash flow controls and cost management. With timely corrective actions, CESANA LTD can stabilize its financial health and support sustainable operations moving forward.

CESANA LTD - Analysis Report

Company Number: 13373743

Analysis Date: 2025-07-29 14:58 UTC

Financial Health Assessment of CESANA LTD

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1. Financial Health Score: C

Explanation:
CESANA LTD exhibits modest financial stability but shows early warning signs of liquidity strain and declining net assets, which suggests cautious monitoring is necessary. The company is currently solvent but its working capital position has deteriorated, indicating potential short-term financial stress.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Current Assets	48,357	47,907	Stable current assets, largely consisting of debtors (accounts receivable).
Cash at Bank	93	1,556	Critically low cash reserves, a symptom of liquidity distress — "weak pulse" in cash flow.
Current Liabilities	49,889	47,452	Slight increase, putting pressure on short-term obligations.
Net Current Assets (Working Capital)	-1,532	455	Negative working capital in 2024 vs positive in 2023 — "symptom of short-term liquidity issues".
Net Assets (Shareholders’ Funds)	697	3,798	Significant decline in net assets, indicating accumulated losses or depletion of equity capital.
Fixed Assets (Tangible)	2,229	3,343	Decrease due to depreciation, assets being consumed without replacement.
Debtors	48,264	46,351	High reliance on payments due, which may be delaying cash inflows.
Employees	1	1	Small workforce consistent with micro/small company status.

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3. Diagnosis

CESANA LTD is currently active and operating within the media representation services sector. The company shows a concerning trend of deteriorating liquidity, evidenced by a sharp drop in cash reserves to only £93 and a swing from positive to negative working capital. This is analogous to a patient whose vital signs are stable but whose blood pressure is starting to fall—indicating potential distress if the underlying issue is not addressed.

The company’s net assets have decreased significantly from £3,798 in 2023 to £697 in 2024, suggesting that retained earnings have been eroded, possibly due to losses or increased liabilities. The fixed assets depreciation without reinvestment hints at aging equipment or resources, which may affect operational efficiency in the future.

The large proportion of current assets tied up in debtors (£48,264) suggests the company’s cash flow is strained by slow collections or extended credit terms, limiting available cash to meet immediate liabilities (£49,889). This mismatch is a classic symptom of cash flow “congestion” that can lead to operational difficulties if not managed properly.

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4. Recommendations

• Improve Cash Flow Management: Prioritize collection of outstanding debts and consider tightening credit terms. Accelerate conversion of receivables into cash to alleviate the “weak pulse” of cash.

• Monitor and Reduce Short-Term Liabilities: Negotiate extended payment terms with creditors or restructure liabilities to prevent liquidity crises.

• Review Profitability and Cost Control: Investigate reasons behind the depletion of net assets. Implement cost-saving measures or revenue enhancement strategies to restore retained earnings.

• Asset Management: Evaluate the usage and necessity of tangible fixed assets. Consider investing in or upgrading key assets if operationally justified to maintain competitive edge.

• Contingency Planning: Prepare for potential cash shortfalls by securing short-term financing or credit lines to ensure the business can sustain operations during periods of low liquidity.

• Regular Financial Monitoring: Establish monthly or quarterly reviews of financial metrics to detect early signs of distress and respond proactively.

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