CLARKES PARKS LIMITED

Executive Summary

Clarkes Parks Limited has improved its financial position from negative to positive net assets, signaling recovery. However, severe liquidity constraints and substantial debt load present ongoing risks. Focused action on improving cash flow, managing debt, and strengthening capital is recommended to secure future financial health.

CLARKES PARKS LIMITED - Analysis Report

Company Number: SC670712

Analysis Date: 2025-07-20 14:50 UTC

Financial Health Assessment of Clarkes Parks Limited (as of 31 December 2023)

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1. Financial Health Score: C

Explanation:
Clarkes Parks Limited shows signs of partial recovery from previous distress but still carries substantial liabilities that constrain its financial health. The company has moved from a negative net asset position to a modest positive net asset base, which is encouraging. However, the heavy borrowing and negative working capital indicate ongoing financial strain. The score "C" reflects a company in cautious recovery, requiring active management of debt and liquidity to avoid relapse into distress.

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2. Key Vital Signs

Metric	2023 Value	Interpretation
Net Assets	£145,840	Positive net worth after prior negative, indicating improved equity.
Fixed Assets (Investments)	£1,365,920	Large fixed assets mainly in investments, stable year-on-year.
Current Assets	£204	Very low liquid assets; cash almost depleted.
Current Liabilities	£733,193	High short-term obligations compared to cash, negative working capital.
Net Current Assets	-£732,989	Severe working capital deficiency; symptoms of liquidity stress.
Long-term Liabilities	£487,091	Significant long-term debt, though slightly reduced from prior year.
Share Capital	£100	Minimal capital base; company relies on reserves and loans.
Profit & Loss Reserve	£145,740	Turned positive from a prior negative balance; shows retained earnings.

Additional Observations:

• The company operates as a holding company with a small number of employees (3), so its financial health is largely tied to its investments and financing structure.
• Bank loans are secured by property and guaranteed by directors, indicating significant creditor confidence but also personal risk exposure.
• The decrease in current liabilities and long-term debt suggests some deleveraging efforts, though obligations remain substantial relative to assets.

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3. Diagnosis

Clarkes Parks Limited is showing early signs of a "convalescing" financial state. After a period of negative net worth (indicative of financial "illness"), the company has returned to positive equity, which can be likened to a patient coming out of a critical state. However, the "symptoms" of distress remain: notably, very low liquid assets and a large gap between short-term liabilities and current assets, representing poor liquidity and potential cash flow challenges.

The heavy reliance on debt financing, both short- and long-term, puts the company at risk if it cannot generate sufficient cash flows from its investments or operational activities. The secured nature of the loans and personal guarantees by directors increase the stakes and pressure on management to maintain financial health.

Given the company’s status as a holding entity, its financial wellness is closely linked to the performance and stability of its subsidiaries and investments. Any downturn in those underlying assets could exacerbate liquidity issues.

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4. Recommendations

• Improve Liquidity: Focus on increasing cash reserves to ease pressure on working capital. This may include renegotiating payment terms with creditors or accelerating receivables collection if applicable.
• Debt Management: Explore options to restructure debt to more manageable terms or reduce outstanding loans either through asset sales or equity injections to reduce financial burden.
• Capital Injection: Consider raising additional equity capital to strengthen the balance sheet and reduce reliance on debt, improving financial resilience.
• Operational Efficiency: Since the company has minimal operational staff, ensure that administrative expenses are tightly controlled to conserve cash.
• Investment Review: Conduct a thorough review of investment assets to assess their liquidity and potential to generate income or be sold if necessary.
• Risk Mitigation: Directors should be aware of personal guarantees on loans and develop contingency plans to protect personal assets.
• Regular Monitoring: Implement frequent financial health "check-ups" (monthly cash flow forecasts and debt covenant reviews) to detect early signs of distress and respond promptly.

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Medical Analogy Summary

Clarkes Parks Limited has moved from a critical financial condition (negative net assets) to a fragile recovery stage (slightly positive equity), akin to a patient emerging from intensive care but still needing close monitoring and supportive treatment. The company’s liquidity "vital signs" are weak, resembling symptoms of ongoing financial stress that could cause relapse if not addressed. Proactive management of debt and cash flow is essential to ensure a full recovery and long-term financial wellness.

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