C&L CARDS LIMITED

Executive Summary

C&L CARDS LIMITED is currently solvent but showing early symptoms of financial strain, marked by a significant decline in equity and working capital over the past year. While liquidity remains positive, proactive cash flow management and cost control are essential to stabilize the company’s financial health. Strengthening profitability and preserving equity will be key to ensuring a sustainable future.

C&L CARDS LIMITED - Analysis Report

Company Number: 14415510

Analysis Date: 2025-07-29 16:19 UTC

Financial Health Assessment of C&L CARDS LIMITED

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1. Financial Health Score: C

Explanation:
C&L CARDS LIMITED is in the early stages of its business life cycle, being incorporated in October 2022 and filing accounts under the micro-entity regime. The company displays basic operational viability with positive net current assets and shareholders’ funds, but shows signs of financial strain as equity has notably declined from £8,974 in 2023 to £2,318 in 2024. This erosion of net assets signals caution but not immediate distress. The overall score of C reflects a company that is currently solvent but with symptoms that require close monitoring and proactive management.

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2. Key Vital Signs

Metric	2023 (Year End)	2024 (Year End)	Interpretation
Current Assets	£16,155	£13,197	Moderate liquidity to cover short-term obligations; slight decrease signals cash or receivables reduction.
Current Liabilities	£7,181	£10,879	Short-term debts increased significantly, heightening pressure on liquidity.
Net Current Assets	£8,974	£2,318	Working capital sharply decreased, indicating tighter operational cash flow.
Shareholders Funds	£8,974	£2,318	Equity base depleted by ~74%, a warning sign of declining retained earnings or losses.
Employees	2	2	Stable workforce size suggests controlled operational scale.

Interpretation of Vital Signs:

• Liquidity: The company maintains positive working capital but the sharp decline indicates a reduced buffer to absorb financial shocks—akin to a patient with lowered vital signs but still stable.
• Solvency: The decrease in shareholders’ funds suggests the company may have sustained losses or made distributions exceeding retained earnings, a symptom of financial stress.
• Operational Stability: A steady number of employees indicates no immediate operational downsizing, but financial pressures could affect future staffing.

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3. Diagnosis

The financial data reveals a company in the "early recovery" or "vulnerable" phase. The positive net current assets and equity confirm solvency and ongoing business operations, but the rapid decline in net assets and working capital suggests underlying "symptoms of distress" potentially related to reduced profit margins, increased costs, or delayed customer payments.

As the company operates within the manufacture of paper stationery (SIC 17230), a sector that can be competitive with tight margins, the financial profile calls for cautious management of cash flow and expenses.

No audit exemption was taken as allowed; however, the absence of a profit and loss account in the filing limits insight into revenue and expense trends, making it harder to pinpoint specific causes of the equity decline.

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4. Recommendations

To improve financial wellness and strengthen the company’s "financial pulse," the following actions are advised:

• Enhance Cash Flow Management:
  Closely monitor receivables and payables to ensure timely collections and negotiate longer payment terms with suppliers where possible. Healthy cash flow is critical to avoid liquidity strain.

• Cost Control Measures:
  Review operational expenses and identify areas to trim unnecessary costs without compromising product quality or employee morale.

• Profitability Analysis:
  Obtain detailed internal financial reports to analyze revenue streams and cost drivers. Understanding the profit and loss dynamics will help identify loss-making areas needing correction.

• Equity Preservation:
  Avoid unnecessary distributions or withdrawals that further reduce shareholders’ funds. Consider capital injections if feasible to rebuild equity.

• Strategic Planning:
  Develop a medium-term plan to boost sales, possibly through product innovation or market expansion, to reverse the declining equity trend.

• Regular Financial Reviews:
  Implement monthly financial health checks to detect early warning signs and enable timely interventions.

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