Company Number: 13555819

Analysis Date: 2025-07-20 11:53 UTC

Financial Health Assessment of Cooper Construction and Management Ltd (as at 31 August 2024)

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1. Financial Health Score: D (Poor Health)

Explanation:
The company exhibits symptoms of financial distress, with negative net assets and working capital deficits indicating liquidity and solvency challenges. The downward trends in key financial indicators suggest that without intervention, the company’s financial health may deteriorate further.

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2. Key Vital Signs

• Net Current Assets (Working Capital): £-19,801 (2024) vs £-16,272 (2023)
  Interpretation: A negative working capital means current liabilities exceed current assets, indicating potential short-term liquidity problems. The trend worsening from the previous year is a concerning symptom of strained cash flow.

• Net Assets (Shareholders’ Equity): £-7,506 (2024) vs £121 (2023)
  Interpretation: Net assets have declined sharply into negative territory, meaning total liabilities exceed total assets. This signals a balance sheet insolvency symptom, where the company owes more than it owns.

• Cash at Bank: £0 (2024) vs £68 (2023)
  Interpretation: Practically no cash on hand raises warning signs of limited buffer to cover immediate expenses or emergencies.

• Debtors: £5,934 (2024) vs £7,987 (2023)
  Interpretation: The decrease in receivables may reflect reduced sales or improved collections; however, given the financial context, it likely indicates shrinking business volume.

• Creditors (Current Liabilities): £25,735 (2024) vs £24,327 (2023)
  Interpretation: Increasing short-term debts exacerbate liquidity stress and may strain supplier relationships if unpaid.

• Tangible Fixed Assets (Net Book Value): £15,179 (2024) vs £20,238 (2023)
  Interpretation: A reduction in fixed assets suggests asset disposals or depreciation, which may limit operational capacity or collateral value.

• Provisions for Liabilities: £2,884 (2024) vs £3,845 (2023)
  Interpretation: Decrease in provisions could indicate settled liabilities or reduced risk exposure, but context is needed.

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3. Diagnosis: Financial Condition Overview

Cooper Construction and Management Ltd is showing clear symptoms of financial distress:

• Liquidity Crisis: The company’s negative working capital and zero cash balance are signs of unhealthy cash flow, indicating difficulty in meeting short-term obligations. This "heart arrhythmia" in cash flow can lead to operational disruptions.

• Balance Sheet Insolvency: The shift from positive equity to significant negative net assets signals that the company is "on life support" financially. This condition reduces creditor confidence and may restrict access to external funding.

• Asset Reduction: The decline in tangible fixed assets may reflect the company selling assets to raise cash or simply asset depreciation. This reduces the firm's operational "muscle" and future earning potential.

• Dependence on Director: With only one employee (the director) and director's current accounts representing a large portion of liabilities (£15,248), the company appears highly reliant on the director's financial support—akin to a patient dependent on external life support.

• Business Activity: The company operates in electrical installation (SIC 43210), a sector typically requiring steady cash flow and investment in equipment. The financial symptoms suggest business operations might be contracting or inefficiently managed.

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4. Recommendations: Path to Recovery and Improved Financial Wellness

• Improve Cash Flow Management:
  Prioritize collection of outstanding debts and negotiate longer payment terms with suppliers to ease working capital pressures — akin to stabilizing the patient’s vital signs.

• Seek Additional Capital Injection:
  Consider equity financing or director loans to restore positive net assets and liquidity. This is like administering a financial transfusion to restore health.

• Cost Control and Operational Efficiency:
  Review operational expenses and reduce non-essential costs to conserve cash and improve profitability.

• Asset Utilization Review:
  Assess whether fixed assets in use are optimized or if underutilized assets can be sold to generate cash without impairing operations.

• Financial Forecasting and Monitoring:
  Implement rigorous budgeting and cash flow forecasting to detect early warning signs and avoid financial shocks.

• Professional Advice:
  Engage with financial advisors or turnaround specialists for restructuring support and to explore refinancing or insolvency options if deterioration continues.

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Executive Summary

Cooper Construction and Management Ltd is currently experiencing significant financial distress, marked by negative working capital and net assets, and a lack of cash reserves. Immediate action is required to stabilize cash flow, secure additional funding, and control costs to prevent further deterioration. With timely intervention, the company can work toward restoring financial health and operational stability.