C.L.A SCAFFOLDING SOLUTIONS LTD

Executive Summary

C.L.A SCAFFOLDING SOLUTIONS LTD is facing significant liquidity challenges as evidenced by its negative working capital and very low cash reserves at the year end 2025. Despite positive equity, the company’s inability to meet short-term obligations signals urgent financial distress requiring immediate cash flow management and debt restructuring. Without swift corrective action, the risk of insolvency may increase.

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Company Analysis

This analysis is opinion only and should not be interpreted as financial advice.

C.L.A SCAFFOLDING SOLUTIONS LTD - Analysis Report

Company Number: 12520292

Analysis Date: 2025-07-29 20:31 UTC

Financial Health Assessment of C.L.A SCAFFOLDING SOLUTIONS LTD (as of 31 March 2025)


1. Financial Health Score: D

Explanation:
The company exhibits concerning signs of financial distress, mainly due to a sharp deterioration in liquidity and working capital in the latest year. While shareholders’ funds remain positive, the negative net current assets and significant drop in cash levels signal that the company is struggling to maintain a healthy cash flow and meet its short-term obligations. This grade reflects a business in a fragile state that requires urgent attention to avoid further decline.


2. Key Vital Signs

Metric 2025 Value Interpretation
Current Assets £1,864 Very low, sharply down from £10,170 in prior year
Cash at Bank £264 Critically low cash reserves, indicates cash flow strain
Debtors £1,600 Significant drop from £6,300, could reflect reduced sales or collections issues
Current Liabilities £12,952 Increased compared to prior year’s £3,787, high short-term debt burden
Net Current Assets (Working Capital) -£11,088 (negative) Symptoms of liquidity distress; company cannot cover short-term debts with current assets
Net Assets (Equity) £1,481 Positive but declining from prior year’s £1,838, weak buffer against losses
Long-term Liabilities £4,235 Reduced from previous year, but still a burden to service
Share Capital £1 Minimal, typical for small companies
Number of Employees 1 Very small operation, limited scale

Interpretation of Vital Signs:

  • The "healthy cash flow" of prior years has deteriorated into a "symptom of distress" in 2025, with cash and current assets severely depleted against rising current liabilities.
  • Negative working capital is a red flag akin to a patient who cannot meet immediate needs, risking insolvency if not corrected.
  • The decline in debtors suggests either a drop in sales or challenges in collecting payments, affecting liquidity.
  • Despite positive net assets, the thin equity margin offers little cushion against shocks.
  • The company’s fixed assets remain stable, showing some capital investment but not enough to offset liquidity issues.

3. Diagnosis

C.L.A SCAFFOLDING SOLUTIONS LTD is currently experiencing acute liquidity stress. The company's balance sheet reveals that it cannot comfortably pay off its short-term liabilities with its available current assets — a classic symptom of cash flow problems. This liquidity crunch may stem from delayed client payments, reduced sales, or increased short-term borrowing.

While the overall net assets remain positive, indicating the company is not insolvent on a balance sheet basis, the rapid deterioration in working capital and cash reserves resembles a "patient" with insufficient vital signs to maintain normal operations. With only one employee and minimal share capital, the business is small and highly vulnerable to operational disruptions.

Additionally, the reduction in long-term liabilities is a positive sign, indicating some debt repayment, but it has not alleviated the immediate cash strain. Without a healthy inflow of cash or restructuring of liabilities, the company risks default on obligations.


4. Recommendations

To improve financial wellness, the company should consider the following steps:

  • Urgent Cash Flow Management:
    Implement strict cash flow controls, accelerate debtor collections, and negotiate extended payment terms with creditors to ease short-term cash pressure.

  • Cost Review and Reduction:
    With only one employee, explore any discretionary expenses and reduce overheads to conserve cash reserves.

  • Debt Restructuring:
    Engage lenders proactively to restructure short-term debt into longer-term facilities, reducing immediate liability pressures.

  • Revenue Enhancement:
    Investigate reasons for reduced debtors and potential decline in turnover; focus on boosting sales or securing new contracts promptly to improve inflows.

  • Financial Monitoring:
    Establish regular financial health check-ups and early warning indicators to detect liquidity issues before they become critical.

  • Seek Professional Advice:
    Consider financial advisory or turnaround specialists who can help reengineer the business model or operations if necessary.



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