COMPONENT SOLUTIONS HOLDINGS LIMITED

Executive Summary

Component Solutions Holdings Limited shows a solid equity foundation but faces liquidity stress and significant asset valuation decline, which could impact financial flexibility. With prudent working capital management and asset review, the company can stabilize its financial health and maintain operational viability. Governance stability and compliance are strengths to build upon.

COMPONENT SOLUTIONS HOLDINGS LIMITED - Analysis Report

Company Number: 13123553

Analysis Date: 2025-07-20 13:38 UTC

Financial Health Assessment for Component Solutions Holdings Limited

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1. Financial Health Score: B-

Explanation:
Component Solutions Holdings Limited demonstrates a solid equity base and stable ownership structure, but shows signs of liquidity stress indicated by persistent negative net current assets. The company’s valuation of fixed assets has declined significantly year-over-year, raising concerns about asset revaluation impacts on net worth. The score "B-" reflects a generally stable but cautious outlook due to these liquidity and asset valuation symptoms.

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2. Key Vital Signs

Metric	Value (2024)	Interpretation
Shareholders’ Funds	£2,095,800	Healthy equity base reflecting net assets ownership.
Current Liabilities	£4,200	Low short-term debt, manageable in absolute terms.
Net Current Assets	-£4,200	Negative working capital suggests liquidity "symptom of distress" — potential cash flow tightness.
Fixed Assets (Investments)	£2,100,000	Core asset base, but down ~32% from prior year due to revaluation, indicating possible impairment or market value drop.
Share Capital	£2,000	Minimal share capital; majority of funds are retained earnings and share premium.
Director and PSC	Single director & 100% control by Mr. Werrell	Clear and stable governance structure.
Company Status	Active	Fully operational without liquidation or administration.
Account Category	Total Exemption Full	Small company with simplified filing, no audit required; less transparency but compliant.

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3. Diagnosis

"Symptoms Analysis":

• The company’s negative net current assets is a classic liquidity symptom akin to an individual having more short-term bills than cash-in-hand. While the absolute figure (£4,200) is modest, it flags potential short-term cash flow constraints if not managed carefully. This could limit the company’s ability to meet immediate obligations or seize quick growth opportunities.

• The significant drop in fixed asset valuation (£975,283 reduction) is a "red flag" indicating a decline in asset value, potentially reflecting market conditions or impairment. This impacts the company's net asset value and may affect borrowing capacity or investor confidence.

• The stable shareholders’ funds show a resilient capital structure but the decline from £3,071,683 in 2023 to £2,095,800 in 2024 is concerning. This drop mainly reflects the revaluation loss rather than operational losses, but still reduces the buffer against financial shocks.

• The company's small scale and single-director governance suggest simplicity and agility but also concentration risk. With only one employee and limited operational data, it likely functions as a holding company with investments rather than an active trading entity.

• Filing compliance is up to date, with no overdue accounts or returns, indicating good administrative health and governance.

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4. Prognosis

• If liquidity issues are not addressed, the company might experience strain in meeting short-term obligations, although current liabilities are low.

• The asset revaluation loss suggests the company should monitor investment valuations closely; further declines could erode equity and creditworthiness.

• The company’s stable ownership and modest liabilities are positives that could support financial recovery if cash flow is managed well.

• Continued absence of operational income data limits full assessment, but the company structure and investment focus imply reliance on subsidiary performance or external income.

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5. Recommendations

• Improve Working Capital Management:
  Consider negotiating longer payment terms or accelerating receivables if applicable to convert negative net current assets to positive, ensuring a "healthy cash flow" akin to a pulse check.

• Asset Valuation Review:
  Conduct detailed analysis of investment assets to understand causes of revaluation loss. If permanent impairment is identified, explore strategic options to stabilize or diversify asset base.

• Liquidity Buffer:
  Maintain or increase cash reserves to buffer against short-term liabilities and unforeseen expenses.

• Governance and Risk Management:
  Given sole director control, implement periodic external reviews or advisory support to ensure corporate governance robustness and mitigate concentration risk.

• Growth and Revenue Strategy:
  Since the company functions as a holding entity, ensure subsidiaries or investments are performing adequately to support overall financial health.

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