CHIM-TAYLOR LIMITED

Executive Summary

CHIM-TAYLOR LIMITED is currently in a financially fragile state, with negative net assets and tight liquidity despite holding significant property assets. The company faces high leverage and ongoing financial distress symptoms, requiring urgent steps to improve cash flow, restructure debt, and potentially inject equity to restore financial health. Without intervention, the risk of insolvency remains elevated.

CHIM-TAYLOR LIMITED - Analysis Report

Company Number: 12758594

Analysis Date: 2025-07-20 18:09 UTC

Financial Health Assessment Report for CHIM-TAYLOR LIMITED

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1. Financial Health Score: D

Explanation:
CHIM-TAYLOR LIMITED shows signs of financial strain, primarily due to persistent net liabilities (negative net assets) and a weak liquidity position. While the company holds significant fixed assets (property), these are heavily leveraged with long-term debts, and current assets are minimal compared to current liabilities. This results in a fragile financial state that requires attention to avoid deeper distress.

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2. Key Vital Signs

Metric	2023 Value (£)	Interpretation
Fixed Assets	486,130	Strong asset base in property; a solid foundation but largely illiquid.
Current Assets	4,875	Very low liquid assets (cash and equivalents); a symptom of tight short-term cash flow.
Current Liabilities	2,234	Relatively low current liabilities, but current assets barely exceed this - fragile working capital.
Net Current Assets	2,641	Slightly positive but very small buffer for day-to-day operations.
Long-term Liabilities	497,675	Heavy debt burden, mostly bank loans and director’s loan; significant leverage on assets.
Net Assets (Equity)	-8,904	Negative net assets indicating liabilities exceed total assets; a symptom of financial distress.
Share Capital	100	Nominal share capital; low equity buffer.
Profit & Loss Reserve	-9,004	Accumulated losses; reflects ongoing negative profitability or write-downs.
Turnover / Revenue	Not disclosed	No turnover data provided; limits assessment of operational profitability.

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3. Diagnosis

Symptoms Analysis:

• "Illiquid but Asset-Rich": The company owns tangible fixed assets valued at £486,130 (property), but these are encumbered with bank loans and director’s loans totaling £497,675, creating a high leverage scenario. This is akin to a patient with a strong skeletal frame but weak muscle support — the assets are present, but the financial muscle is lacking.

• "Negative Equity Syndrome": Persistent negative net assets over four years (-£8,904 in 2023, slightly improved from -£11,012 in 2022) indicate ongoing losses or accumulated deficits. This is a clear symptom of financial distress, showing the company’s obligations exceed its resources.

• "Tight Liquidity": Current assets (cash) are minimal (£4,875), barely covering current liabilities (£2,234). The narrow working capital margin puts the company at risk of short-term liquidity crunches, much like a patient with low blood pressure—there’s not enough liquid capital flowing to support immediate needs.

• "Leverage Overload": Long-term liabilities are almost equal to fixed assets, suggesting that the company is highly leveraged. This is a warning sign akin to elevated cholesterol in a patient — a risk factor that could lead to financial complications if not addressed.

• "No Employees and Low Operational Activity": The company reports zero employees and no turnover data, implying it may be a holding or property leasing entity rather than an operational business. This limits cash inflows and puts more pressure on managing debt servicing through rental income or other means.

Overall Diagnosis:
CHIM-TAYLOR LIMITED currently exhibits financial fragility characterized by high leverage, negative equity, and limited liquidity. The company’s balance sheet resembles a patient with a strong but heavily burdened heart (assets) struggling to pump enough blood (cash flow) to sustain daily functions. Without intervention, this could lead to worsening financial health.

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4. Recommendations

To improve the company’s financial wellness and avoid progression towards insolvency, consider the following actions:

1. Liquidity Improvement:

   • Increase cash reserves by accelerating receivables collection or injecting additional capital.
   • Negotiate extended payment terms with creditors to ease immediate cash outflows.
   • Explore short-term financing options if needed, but cautiously to avoid further leverage.

2. Debt Restructuring:

   • Engage lenders (bank and director) to restructure long-term debts, possibly extending maturities or reducing interest rates.
   • Consider partial debt forgiveness or conversion of director loans into equity to improve net assets.

3. Operational Review:

   • If the company is generating rental income, ensure that rents are at market rates and collection is efficient.
   • Explore opportunities to increase turnover or diversify income streams to build profitability.

4. Equity Injection:

   • Consider fresh equity investment from existing shareholders or third parties to bolster shareholders’ funds and reduce negative net assets.

5. Regular Financial Monitoring:

   • Implement robust cash flow forecasting and financial reporting to detect early signs of distress.
   • Review financial performance quarterly to adjust strategy proactively.

6. Professional Advice:

   • Consult insolvency or restructuring specialists if financial conditions worsen.
   • Ensure compliance with statutory filings to avoid regulatory penalties.

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