CHEAPER THAN A SKIP (GLASGOW) LTD

Executive Summary

Cheaper Than A Skip (Glasgow) Ltd has a positive net asset position but exhibits signs of liquidity stress with negative working capital and low cash reserves, typical for a young business. Strengthening cash flow and working capital management are critical to improving its financial health and securing a stable growth trajectory.

CHEAPER THAN A SKIP (GLASGOW) LTD - Analysis Report

Company Number: SC777046

Analysis Date: 2025-07-20 18:23 UTC

Financial Health Assessment of Cheaper Than A Skip (Glasgow) Ltd

As at 31 July 2024

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1. Financial Health Score: C

Explanation:
The company exhibits early-stage financial characteristics typical of a new business. While there is positive net asset value showing some retained earnings, the company has a negative working capital position and minimal cash reserves. This suggests manageable but present liquidity strain, meriting a cautious outlook.

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2. Key Vital Signs

Metric	Value	Interpretation
Cash at Bank	£895	Very low cash balance indicating limited liquid resources; potential "cash flow fragility."
Current Liabilities	£4,138	Short-term debts due within one year; relatively high compared to cash and current assets.
Net Current Assets (Working Capital)	-£3,243	Negative working capital—a "symptom of distress"—indicating the company may struggle to meet short-term obligations using current assets.
Net Assets (Shareholders’ Funds)	£2,757	Positive net asset value reflects the capital invested and accumulated profits; indicates some financial "resilience."
Tangible Fixed Assets	£6,000	Investment in motor vehicles (depreciated); a sign of operational capacity building.
Share Capital	£1	Minimal initial capital; typical for a new small company.
Staff Numbers	2	Small workforce consistent with a micro or small enterprise.

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3. Diagnosis: What the Numbers Reveal

• Liquidity and Cash Flow:
  The company has a very modest cash reserve (£895) against current liabilities of £4,138. This suggests a fragile cash flow position akin to a patient with low blood pressure—there is a risk of "cash flow collapse" if revenues or collections slow further, or if unexpected expenses arise.

• Working Capital Deficit:
  Negative net current assets (-£3,243) indicate that current liabilities exceed current assets. This is a classic "symptom of financial stress," which means the company does not have enough short-term assets to fully cover its short-term debts, potentially risking payment delays or the need for external funding.

• Capital Structure & Solvency:
  The company retains positive net assets (£2,757), supported mainly by tangible fixed assets (motor vehicles) and retained earnings. This is a "healthy heart" sign showing that overall net worth is positive, which provides a buffer to creditors and signals solvency at this stage.

• Early-Stage Company Dynamics:
  Incorporated in July 2023 and filing accounts for the first financial period, the company appears to be in the investment and setup phase. The tangible assets (motor vehicles) indicate operational readiness, but low cash reserves and working capital challenges reflect typical early business growing pains.

• Governance and Control:
  The sole director and 100% controlling shareholder, Lauren Milligan, indicates centralized control and decision-making, which can be advantageous for swift decisions but may also concentrate risk.

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4. Recommendations: Steps to Improve Financial Wellness

• Boost Liquidity:
  Prioritize increasing cash reserves through improved cash collections, negotiating extended payment terms with suppliers, or securing short-term financing. Think of this as "restoring blood volume" to avoid cash flow collapse.

• Improve Working Capital Management:
  Monitor and manage receivables and payables carefully. Accelerate debtor collections and delay non-critical payments where possible. This can help reverse the negative working capital "symptom."

• Cost Control & Revenue Growth:
  Maintain tight control on operating expenses and focus on growing sales to improve profitability and create a buffer against liabilities.

• Plan for Contingencies:
  Establish a contingency plan for unexpected expenses or delayed payments, such as an overdraft facility or emergency credit line.

• Regular Financial Monitoring:
  Implement monthly or quarterly financial reviews to monitor liquidity, cash flow, and working capital metrics closely. Early detection of issues is like regular health check-ups preventing deterioration.

• Consider Capital Injection:
  If feasible, consider additional equity investment to strengthen the balance sheet and provide operational flexibility.

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Executive Summary

Cheaper Than A Skip (Glasgow) Ltd is a newly incorporated company showing positive net worth but facing early liquidity challenges, indicated by its negative working capital and low cash reserves. The company demonstrates operational potential through asset investment but must focus on improving cash flow and working capital management to ensure financial stability and growth. Immediate attention to liquidity and cost control will be key to avoiding financial distress as the business develops.