COMPREHENSIVE REMOVALS & STORAGE LIMITED

Executive Summary

COMPREHENSIVE REMOVALS & STORAGE LIMITED is facing liquidity challenges and declining equity, signaling financial distress despite ongoing operations. Immediate focus on improving working capital and controlling costs is essential to stabilize the business and prevent further deterioration. With strategic management, the company can recover financial health and sustain growth.

COMPREHENSIVE REMOVALS & STORAGE LIMITED - Analysis Report

Company Number: 12804343

Analysis Date: 2025-07-20 16:08 UTC

Financial Health Assessment Report for COMPREHENSIVE REMOVALS & STORAGE LIMITED

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1. Financial Health Score: Grade C

Explanation:
The company shows signs of financial strain, primarily due to negative net current assets and declining net assets. While it remains solvent and operational, the shrinking equity and working capital deficits are symptoms of liquidity challenges. This places the business in a moderate risk category requiring attention to improve its financial wellness.

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2. Key Vital Signs

Metric	2024 Value (£)	Interpretation
Fixed Assets	201,946	Substantial investment in long-term assets—core to operations.
Current Assets	61,149	Cash, receivables, and stock available to cover short-term obligations.
Current Liabilities	225,928	Debts and obligations due within one year; significantly higher than current assets.
Net Current Assets (Working Capital)	-164,779	Negative value indicates potential liquidity problems; unable to cover short-term debts fully.
Total Net Assets (Equity)	9,988	Very low equity base, decreased from previous year (£19,699), signaling erosion of net worth.
Share Capital	100	Minimal share capital; most financing likely from retained earnings or loans.
Average Number of Employees	8	Small workforce consistent with micro-entity classification.

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3. Diagnosis: Financial Symptoms and Underlying Business Health

• Liquidity Stress: The company’s negative working capital (net current assets of -£164,779) is a critical symptom of financial distress. This means short-term liabilities substantially exceed short-term assets, potentially leading to cash flow shortages and difficulty meeting immediate obligations.

• Erosion of Equity: Net assets have dropped by approximately 50% from £19,699 to £9,988 in one year, reflecting either operating losses or asset write-downs. This shrinking equity "reserve" reduces the company’s cushion against financial shocks.

• Asset Utilization: Fixed assets have decreased by roughly £44,000 from £246,275 to £201,946, possibly due to depreciation or asset sales. This decline may impact operational capacity or signal cost-cutting measures.

• Payroll and Operational Scale: Maintaining an average of 8 employees aligns with micro-entity status, indicating a lean operation, but the company must ensure that personnel costs and overheads do not exacerbate liquidity issues.

• Debt Burden: Current liabilities are high relative to assets, and there are creditors due beyond one year (£27,179), indicating ongoing debt obligations that require careful management.

• Overall Condition: The company is in a fragile financial position. The "vital signs" suggest it is struggling to maintain healthy cash flow and preserve capital. Without intervention, these symptoms could develop into serious distress, risking insolvency.

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4. Recommendations: Steps to Improve Financial Wellness

1. Improve Liquidity Management:

   • Accelerate collection of receivables and optimize inventory turnover to boost current assets.
   • Negotiate extended payment terms with suppliers to reduce immediate liabilities.

2. Cost Control and Efficiency:

   • Review operational expenses, especially payroll and overheads, to align costs with revenue generation.
   • Consider asset utilization strategies to maximize returns or dispose of underperforming fixed assets.

3. Capital Structure Review:

   • Explore options for increasing equity capital or securing more favorable financing to strengthen the balance sheet.
   • Assess debt refinancing opportunities to reduce interest burden and improve cash flow.

4. Financial Planning and Monitoring:

   • Implement robust cash flow forecasting to anticipate liquidity needs and avoid surprises.
   • Regularly monitor key financial ratios for early detection of distress signals.

5. Strategic Business Review:

   • Evaluate the business model and market positioning to identify growth opportunities or diversification.
   • Engage professional advisory services if needed for restructuring or turnaround strategies.

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Medical Analogy Summary:

The company presently exhibits symptoms akin to a patient with "poor circulatory health"—the cash flow (blood) is insufficient to nourish the vital organs (operations) fully. The shrinking equity (body reserves) indicates prolonged stress without adequate recovery, risking systemic failure if corrective measures are not taken promptly. Timely intervention focusing on liquidity and cost control can restore financial vitality and improve prognosis.

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