COLBREN INVESTMENTS LIMITED

Executive Summary

Colbren Investments Limited is currently facing significant financial challenges, characterized by a severe liquidity shortage and negative net assets. Without prompt financial restructuring and strategic action to improve cash flow and asset quality, the company risks further deterioration in financial health. Immediate capital support and operational review are critical to stabilizing the business.

COLBREN INVESTMENTS LIMITED - Analysis Report

Company Number: SC738988

Analysis Date: 2025-07-29 20:42 UTC

Financial Health Assessment of COLBREN INVESTMENTS LIMITED

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1. Financial Health Score: D

Explanation:
The company displays significant financial distress symptoms, notably a negative net asset position and very weak liquidity. While it is not insolvent per se, the financials reveal early warning signs of distress that require urgent attention to avoid further deterioration.

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2. Key Vital Signs

Metric	Value (£)	Interpretation
Cash at bank and in hand	201	Critically low cash reserves—risk of cash flow problems.
Current Liabilities	100,890	High short-term obligations; significant burden.
Net Current Assets (Working Capital)	-100,689	Negative working capital indicates inability to cover short-term debts with short-term assets.
Net Assets	-7,118	Negative net assets (shareholders' deficit) signals insolvency on a balance sheet basis.
Shareholders' Funds	-7,120	Equity is in deficit, indicating losses accumulated or capital impairment.
Fixed Assets (Investments)	93,571	Investments represent the main asset but are not liquid and have shown a revaluation decrease (-8,231).
Turnover and Profit/Loss	Not reported	No income reported; losses reflected in reserves.

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3. Diagnosis: Underlying Business Health

• Liquidity Crisis: The company’s "healthy cash flow" sign is absent; with only £201 cash against £100,890 current liabilities, it faces a liquidity crunch. This is akin to a patient with severely depleted blood volume—there is not enough liquid resource to meet immediate demands, risking operational failure.

• Balance Sheet Weakness: The negative net assets and shareholders' deficit indicate the company’s liabilities exceed its assets. This “symptom of distress” shows accumulated losses or impaired asset values (investments have fallen in value), undermining solvency.

• Operational Activity: The company reports no employees and no revenue, implying it may be either in a start-up phase, holding company status, or inactive in trading operations. The lack of turnover and profit inflows limits its ability to improve cash flow or repay liabilities.

• Investment Asset Risk: The fixed asset investments are the company’s main asset, but their value has declined (£101,802 additions reduced by £8,231 revaluation). This signals potential impairment risk and volatility in asset value, which could worsen financial health if market conditions deteriorate.

• Governance and Control: The controlling person holds 25-50% shares and voting rights, with director responsibilities centralized, which may concentrate decision-making but also risk less oversight in crisis.

Overall, the financial "vitals" suggest the company is in an unhealthy state, with symptoms indicating risk of insolvency without corrective intervention.

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4. Recommendations: Steps to Improve Financial Wellness

1. Immediate Cash Injection or Financing:

   • Seek capital infusion from shareholders or external investors to shore up cash reserves and reduce liquidity risk.
   • Consider short-term credit facilities but cautiously, to avoid exacerbating liabilities.

2. Asset Review and Realisation:

   • Evaluate the investment portfolio for possible sale or restructuring to realise cash and reduce exposure to asset value fluctuations.
   • Consider impairment tests regularly to reflect true asset worth and avoid overstating financial health.

3. Cost and Liability Management:

   • Negotiate with creditors to extend payment terms or reduce liabilities.
   • Minimise discretionary costs and operational expenditure to conserve cash.

4. Strategic Business Review:

   • Define clear business objectives and revenue-generating activities to improve turnover.
   • Explore diversification or new income streams to reverse losses and build retained earnings.

5. Financial Reporting and Monitoring:

   • Establish rigorous cash flow forecasting and financial controls.
   • Monitor key financial indicators regularly to detect early warning signs.

6. Governance Enhancement:

   • Consider appointing additional directors or advisors for enhanced oversight.
   • Maintain compliance with filing deadlines to avoid penalties and negative reputational impact.

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