CITY ROOFSCAPES LIMITED

Executive Summary

CITY ROOFSCAPES LIMITED is currently experiencing significant financial distress, with persistent negative net assets and working capital indicating liquidity challenges. The company depends on director support and related party loans to maintain operations. Immediate focus on cash flow improvement, cost control, and capital restructuring is essential to restore financial health and ensure business continuity.

CITY ROOFSCAPES LIMITED - Analysis Report

Company Number: 13660225

Analysis Date: 2025-07-20 17:56 UTC

Financial Health Assessment of CITY ROOFSCAPES LIMITED (as of 30 March 2024)

---

1. Financial Health Score: D (Poor)

Explanation:
CITY ROOFSCAPES LIMITED exhibits significant financial distress as indicated by persistent net liabilities, negative working capital, and shareholders’ deficit. The company’s financial "vital signs" resemble symptoms of chronic cash flow strain and capital depletion, which are warning signals of an unhealthy financial state. Without timely intervention, the prognosis remains guarded.

---

2. Key Vital Signs

Metric	Value (£)	Interpretation
Current Assets	32,552	Low short-term assets, mainly debtors, indicating limited liquid resources.
Current Liabilities	85,579	High short-term obligations due within one year, significantly exceeding assets.
Net Current Assets (Working Capital)	-53,027	Negative working capital indicates liquidity strain—company owes more than it owns short-term.
Net Assets (Total Equity)	-53,027	Negative net assets, indicating the company owes more than it owns overall.
Shareholders’ Funds	-53,127	Shareholders’ equity is in deficit, showing accumulated losses exceeding invested capital.
Trade Debtors	19,597	Substantial receivables, but significantly reduced from prior year, possibly indicating reduced sales or collection issues.
Trade Creditors	13,412	Moderate trade payables, but overall creditors are high due to other liabilities.
Bank Loans and Overdrafts	29,998	Moderate reliance on external debt financing.
Related Party Loan	26,850	Significant loan from a related party, which may be crucial for liquidity support.

Interpretation:
The company is showing clear symptoms of financial distress: negative working capital (akin to a patient whose blood pressure is dangerously low), persistent negative net assets (like a body with prolonged nutrient deficiency), and dwindling current assets. Its operational cash inflows (debtor balances) have decreased sharply from prior years, potentially signaling reduced sales or collection difficulties. The rising reliance on loans, including from related parties, suggests the company is dependent on external lifelines to maintain operations.

---

3. Diagnosis: Overall Financial Condition

CITY ROOFSCAPES LIMITED is in a precarious financial condition characterized by:

• Liquidity Strain: Negative working capital means the company does not have enough short-term assets to meet its immediate liabilities, a symptom of cash flow problems that could impair day-to-day operations.
• Capital Deficiency: The negative net assets and shareholders’ deficit indicate accumulated losses exceeding the invested capital. This is a sign of a company that has been "bleeding" capital over several periods.
• Ongoing Support Required: The directors have indicated ongoing funding support to maintain going concern status. This signals that without such support, the company’s survival is at risk.
• Related Party Exposure: The company depends on loans from related parties, which while helpful, also raises concerns about the sustainability and independence of financial health.
• Lack of Profitability Data: The absence of a statement of comprehensive income limits the ability to analyze profitability trends, but the balance sheet tells a story of operational challenges and financial stress.

In medical terms, CITY ROOFSCAPES LIMITED is like a patient with chronic illness requiring ongoing treatment and monitoring. The body (company) is struggling to maintain equilibrium due to underlying financial weaknesses.

---

4. Recommendations to Improve Financial Wellness

• Enhance Cash Flow Management:
  Prioritize collection of outstanding debts and manage payment terms with suppliers to improve liquidity. Consider negotiating extended payment terms to ease short-term cash outflows.

• Cost Control and Revenue Growth:
  Review operational costs rigorously to identify and eliminate inefficiencies. Explore new markets or services to boost turnover and improve debtor balances.

• Restructure Debt:
  Evaluate the possibility of refinancing existing loans on better terms or converting some debt into equity to strengthen the balance sheet and reduce immediate liabilities.

• Seek Additional Capital Injection:
  Attract fresh equity investment to reduce negative net assets and restore shareholder confidence.

• Formal Financial Planning:
  Implement detailed budgeting, forecasting, and regular financial health reviews akin to routine check-ups to detect early signs of distress and act promptly.

• Independent Audit or Review:
  While currently exempt, consider an independent financial audit or review to provide stakeholders with confidence in financial reporting and to uncover hidden risks.

• Contingency Planning:
  Prepare for adverse scenarios including cash shortages and delayed payments by establishing a financial contingency plan.

---