CHARLIE WCS LIMITED

Executive Summary

Charlie Wcs Limited has demonstrated a strong turnaround in financial health, marked by increased net assets and working capital. However, the company faces liquidity risks due to very low cash balances relative to rising debtors. Focused improvement in cash flow management will be critical to sustaining growth and financial wellness.

CHARLIE WCS LIMITED - Analysis Report

Company Number: 13812205

Analysis Date: 2025-07-20 13:14 UTC

Financial Health Assessment for CHARLIE WCS LIMITED

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1. Financial Health Score: B

Explanation:
Charlie Wcs Limited shows solid improvement in its working capital and net asset position from 2022 to 2023, indicating strengthening financial health. The company maintains positive net current assets and shareholders’ funds, suggesting it is financially stable with no immediate distress signals. However, the very low cash balance and concentration of assets in debtors pose some liquidity risk, preventing an 'A' grade.

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2. Key Vital Signs

Metric	2023 (£)	2022 (£)	Interpretation
Current Assets	14,335	4,307	Significant increase, driven by higher debtors
Cash	120	835	Very low cash; potential liquidity strain
Debtors	14,215	3,472	Large increase indicates growth but risk if unpaid
Current Liabilities	4,207	4,207	Stable short-term obligations
Net Current Assets	10,128	100	Healthy working capital, improved from near break-even
Net Assets (Shareholders’ Funds)	10,128	100	Improved net worth, positive retained earnings
Share Capital	100	100	Stable equity base
Employees (Average)	2	2	Small workforce consistent with micro/small company

Interpretation:

• Healthy cash flow is not highly evident due to very low cash holdings despite increased sales (debtors). The company relies heavily on receivables collection.
• Symptoms of distress such as overdue creditors or negative working capital are absent.
• The increase in debtors suggests growth but also raises the need for effective credit control to avoid cash flow bottlenecks.
• Shareholders’ funds increased dramatically, indicating profit retention and a stronger capital base.

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3. Diagnosis

Charlie Wcs Limited is exhibiting signs of a growing company in the window cleaning service sector. The balance sheet shows a stable and improving financial condition with net assets increasing from £100 to over £10,000 within one year, reflecting accumulated profits and business expansion.

Strengths:

• Positive and improving working capital indicating good short-term financial health.
• No overdue filings or legal flags; company status is active and solvent.
• Ownership and control are clear, with no director disqualifications or governance issues reported.

Weaknesses:

• Very low cash reserves relative to debtors imply potential liquidity challenges if customers delay payments.
• Dependence on debtors may create stress on cash flow if not managed properly.
• Limited scale (small employee base, low share capital) may restrict growth or resilience in downturns.

Overall, the company is financially "fit" but should be cautious of cash flow management to prevent symptoms of financial distress in the future.

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4. Recommendations

• Enhance Cash Management: Improve debtor collection processes to convert receivables into cash more quickly. Consider offering early payment incentives or tightening credit terms to reduce outstanding debtors.
• Build Cash Reserves: Aim to increase cash holdings to cover at least 3 months of liabilities to buffer against unforeseen expenses or payment delays.
• Monitor Working Capital: Maintain net current assets at healthy levels and keep current liabilities under control. Avoid over-reliance on credit sales without ensuring timely collection.
• Financial Planning: Develop a rolling cash flow forecast to anticipate and manage liquidity requirements proactively.
• Growth Strategy: Given the company’s positive trajectory, consider strategic investments in equipment or marketing to capitalize on market opportunities, balanced against maintaining financial stability.
• Governance and Compliance: Continue timely filing of accounts and confirmation statements to uphold good corporate governance and maintain stakeholder confidence.

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