Company Number: 13943857

Analysis Date: 2025-07-20 11:35 UTC

Financial Health Assessment for COLDONES LTD

---

1. Financial Health Score: Grade D

Explanation:
COLDONES LTD shows signs of financial distress primarily due to negative shareholders' funds and significant long-term liabilities compared to current assets. While the company has increased its current assets substantially in the latest year, the presence of creditors due after one year amounting to £80,198 has pushed net equity into negative territory (£-2,167). These are symptoms of financial strain, indicating liquidity and solvency challenges. The absence of employees and minimal operational scale reflected in the micro-entity accounts also suggests a nascent or underdeveloped business stage.

---

2. Key Vital Signs

Metric	2024 Value	Interpretation
Current Assets	£78,118	Healthy increase from £699, indicating better short-term resources available.
Current Liabilities	£87	Very low current liabilities, suggesting manageable short-term debts.
Creditors due after 1 year	£80,198	Significant long-term debt, a red flag for solvency.
Shareholders' Funds (Equity)	£-2,167	Negative equity indicates liabilities exceed assets; sign of financial distress.
Average Number of Employees	0	No staff employed, indicating limited business activity or early stage.

Interpretation:

• The healthy cash flow signaled by increased current assets is overshadowed by the symptom of distress from long-term creditors and negative net equity.
• Net current assets (working capital) are positive (£78,031), which is a good sign for short-term liquidity.
• Negative shareholders' funds indicate the company owes more than it owns overall — a key warning sign often associated with insolvency risks if not addressed.

---

3. Diagnosis

COLDONES LTD currently operates as a micro-entity with low operational scale (no employees) and is likely in an early development or startup phase. The company has improved its liquid asset base significantly within the latest financial year, which is a positive vital sign for short-term operational health. However, the presence of a substantial creditor balance due after one year (£80,198) combined with negative shareholders’ funds indicates the company is under financial strain, with its liabilities exceeding its assets.

This imbalance creates a symptom of distress that can restrict access to additional finance, reduce stakeholder confidence, and increase risk of insolvency if the company cannot either convert liabilities, generate profits, or restructure its debts. The fact that the director holds 75-100% control suggests decisions on financial restructuring or capital infusion rest with a single individual, which may aid in swift decision-making.

---

4. Recommendations

1. Address Long-Term Liabilities:

   • Engage with creditors to restructure or extend repayment terms to alleviate pressure on net equity and reduce immediate solvency risk.
   • Explore opportunities for equity injections or capital increases to improve net assets and provide a buffer against liabilities.

2. Boost Operational Activity and Revenue Generation:

   • With no employees, the company should consider whether outsourcing or hiring is necessary to expand business operations and improve revenue streams, especially given its IT consultancy and retail via internet SIC codes.
   • Improving turnover can help convert liabilities into profitable assets and improve financial stability.

3. Cash Flow Management:

   • Maintain and improve cash reserves by monitoring receivables and payables, ensuring the company continues to have a “healthy cash flow” to meet short-term obligations comfortably.

4. Regular Financial Monitoring:

   • Implement monthly or quarterly financial reviews to detect early symptoms of liquidity or solvency issues.
   • Prepare for annual filings well in advance to avoid penalties and maintain regulatory compliance.

5. Consider Professional Advice:

   • Given the negative equity and creditor structure, seeking advice from a financial restructuring expert or insolvency practitioner could provide tailored strategies for recovery and sustainable growth.

---