COLOSSUS HOME SOLUTIONS LIMITED

Executive Summary

Colossus Home Solutions Limited holds a substantial asset base but faces liquidity challenges due to high debt and low current assets. While the company remains solvent with positive net assets, its financial health is fragile and requires focused cash flow and debt management to ensure long-term stability.

COLOSSUS HOME SOLUTIONS LIMITED - Analysis Report

Company Number: 12796988

Analysis Date: 2025-07-20 14:59 UTC

Financial Health Score: C

The company shows moderate financial stability with a strong asset base but significant signs of liquidity stress.

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Key Vital Signs:

1. Fixed Assets: £350,000 (stable over recent years)

   • Indicates a substantial investment in long-term assets, likely property or equipment, consistent with its real estate letting activities.

2. Current Assets: £3,380 (increased from £792 last year)

   • Represents cash and short-term receivables. The amount is very low relative to liabilities, signaling limited liquid resources.

3. Current Liabilities: £316,304 (stable but very high)

   • These are debts due within one year. The current liabilities far exceed current assets, indicating a working capital deficit if net current assets were negative.

4. Net Current Assets: £3,380 (positive but minimal)

   • Net current assets are positive but very small compared to liabilities, which may indicate tight liquidity.

5. Creditors: Amounts Falling Due After More Than One Year: £316,304

   • The company carries very high long-term debt or obligations, which is a significant burden.

6. Net Assets (Shareholders' Funds): £35,634 (improved modestly from previous years)

   • Positive net assets suggest the company is solvent but only marginally so relative to the scale of liabilities.

7. Share Capital: £100

   • Very minimal share capital, typical for micro-entities and possibly indicating limited equity funding.

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Symptoms Analysis:

• The company has a healthy fixed asset base of £350,000, which is a strong foundation reflecting ownership or leasehold of real estate assets in line with its SIC code (68209 - Other letting and operating of own or leased real estate).

• However, the current assets are very low compared to current liabilities, implying symptoms of liquidity distress. The business may struggle to meet short-term obligations without relying on asset sales or refinancing.

• The current liabilities and creditors due after more than one year are extremely high relative to net assets. This indicates the company is highly leveraged, carrying significant debt burden.

• Despite these pressures, the company maintains positive net assets and shareholder funds, showing it is not insolvent but rather in a fragile financial position.

• The small increase in net assets over recent years suggests modest improvements or retained earnings, but the scale is small compared to liabilities, indicating limited financial cushion.

• The company has only one employee on average, suggesting a lean operational structure consistent with a micro-entity.

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Diagnosis:

Colossus Home Solutions Limited is a micro-entity with a solid asset holding in fixed assets but strained liquidity and high leverage. The financial "vital signs" show a stable but precarious condition: assets outweigh liabilities, but the company is highly reliant on long-term debt and has very limited liquid resources to cover current liabilities.

This situation is analogous to a patient with a strong heart (asset base) but low blood pressure (liquidity), needing close monitoring and intervention to avoid a crisis. The company is solvent but vulnerable to cash flow shocks or increases in liabilities.

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Prognosis:

If the company maintains its current trajectory without increasing liquidity or reducing debt, it faces potential cash flow challenges that could impair operational flexibility. However, its positive net assets provide a buffer to restructure or refinance.

The outlook depends on:

• Improving cash flow management to boost current assets.
• Negotiating debt terms to reduce pressure of current liabilities.
• Possibly raising additional equity or reducing operational costs.

Without corrective action, the company risks liquidity strain, but with prudent financial management, it can stabilize and build resilience.

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Recommendations:

1. Enhance Liquidity:

   • Prioritize increasing cash reserves and receivables collection to improve working capital.
   • Explore short-term financing options with favorable terms to alleviate immediate pressure.

2. Debt Management:

   • Review and renegotiate creditor terms to spread liabilities over a longer period or reduce amounts payable.
   • Consider refinancing expensive or short-term debts into longer-term arrangements.

3. Equity Injection:

   • Assess the possibility of raising additional capital from shareholders or new investors to strengthen the balance sheet.

4. Operational Efficiency:

   • Maintain lean operations to reduce cash outflows and enhance profitability.

5. Regular Financial Monitoring:

   • Implement monthly cash flow forecasting and financial reviews to detect and address emerging distress early.

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